What is the time limit for supply of copies of the franchising contract in Vietnam?

What is the time limit for supply of copies of the franchising contract in Vietnam?

Pursuant to Article 8 of the Decree 35/2006/NĐ-CP stipulating the franchisor's responsibility to supply information in Vietnam as follows:

1. The franchisor shall have to supply copies of the franchising contract form and the written introduction of its franchising to the intended franchisee at least 15 working days before signing the franchising contract, unless otherwise agreed by the parties. Compulsory contents of the written introduction of franchising shall be specified and promulgated by the Ministry of Trade.

2. The franchisor shall have to promptly notify all franchisees of all important changes in the franchising system, which may affect the latter's business activities by mode of franchising.

3. Where the franchised commercial right is a common one, the secondary franchisor shall, apart from supplying information according to the provisions of Clause 1 of this Article, have to notify in writing the intended franchisee of the following contents:

a) Information on the franchisor that has granted commercial rights to it;

b) Contents of the common franchising contract;

c) Method of handling secondary franchising contracts in case of termination of the common franchising contract.

As regulations above, the franchisor has responsibility to supply copies of the franchising contract form and the written introduction of its franchising to the your enterprise at least 15 working days before signing the franchising contract, unless otherwise agreed by the parties. Your enterprise may sent a written document to remind the other party.

What contents are included in the franchising contract in Vietnam?

Pursuant to Article 11 of the Decree 35/2006/NĐ-CP stipulating contents of the franchising contract in Vietnam as follows:

Where the parties choose to apply Vietnamese law, a franchising contract may have the following principal contents:

1. Content of franchised commercial right.

2. Rights and obligations of the franchisor.

3. Rights and obligations of the franchisee.

4. Price, periodical franchise fee and mode of payment.

5. Valid term of the contract.

6. Renewal and termination of the contract, and settlement of disputes.

Above are primary contents in the franchising contract in Vietnam.

Can the franchisee transfer commercial rights to another intended franchisee in Vietnam?

Pursuant to Article 15 of the Decree 35/2006/NĐ-CP stipulating transfer of commercial rights in Vietnam as follows:

1. The franchisee may transfer commercial rights to another intended franchisee when the following conditions are satisfied:

a) The intended transferee satisfies the conditions specified in Article 6 of this Decree;

b) Such transfer is consented by the franchisor that has granted commercial rights to the transferring franchisee (hereinafter referred to as the direct franchisor).

2. The franchisee must send a written request for transfer of commercial rights to the direct franchisor.

Within 15 days after receiving such written request of the franchisee, the direct franchisor must reply in writing, clearly stating:

a) Its consent to the transfer of commercial rights by the franchisee; or

b) Its rejection of the transfer of commercial rights by the franchisee for the reasons specified in Clause 3 of this Article.

Past the above-said time limit of 15 days, if the direct franchisor fails to reply in writing, it shall be deemed as having consented to the transfer of commercial rights by the franchisee.

3. The direct franchisor may reject the transfer of commercial rights of the franchisee for one of the following reasons:

a) The intended transferee fails to fulfill its financial obligations under the franchising contract;

b) The intended transferee has not yet satisfied the criteria for being selected by the direct franchisor;

c) The transfer of commercial rights may exert a great adverse impact on the existing franchising system;

d) The intended transferee disagrees in writing to fulfill the obligations of the franchisee under the franchising contract;

e) The franchisee has not yet fulfilled the obligations toward the direct franchisor, except here the intended transferee makes a written commitment to fulfill such obligations on the franchisee's behalf.

4. The transferor of commercial rights shall no longer hold the transferred commercial rights. All rights and obligations related to commercial rights of the tranferor shall be transferred to the transferee, unless otherwise agreed.

As regulations above, the franchisee can transfer commercial rights to another intended franchisee in Vietnam when the above conditions.

Best regards!