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During the process of engaging in franchise transactions in Vietnam, both the franchisor and the franchisee have specific rights and obligations defined by law and the franchise agreement. Below is an overview of the rights and obligations of each party:
Rights of Parties Involved in Franchise Activities
Based on the provisions of Article 286 of the 2005 Commercial Law, the rights of the franchisor are specifically stipulated as follows:
- Receive franchise fees;
- Organize advertising for the franchise system and network;
- Periodically or unexpectedly inspect the activities of the franchisee to ensure the uniformity of the franchise system and the stability of the quality of goods and services.
Based on the provisions of Article 288 of the 2005 Commercial Law, the rights of the franchisee are specifically stipulated as follows:
- Request the franchisor to provide sufficient technical assistance related to the franchise system;
- Require the franchisor to treat equally with other franchisees within the franchise system.
Obligations of Parties Involved in Franchise Activities
Based on Article 287 of the 2005 Commercial Law, the franchisor has the following obligations:
- Provide guidance materials on the franchise system to the franchisee;
- Provide initial training and regular technical assistance to the franchisee to operate according to the franchise system;
- Design and arrange sales locations, supply services at the expense of the franchisee;
- Ensure intellectual property rights for the objects specified in the franchise agreement;
- Treat equally with other franchisees within the franchise system.
Based on the provisions of Article 289 of the 2005 Commercial Law, the franchisee has the following obligations:
- Pay franchise fees and other payments according to the franchise agreement;
- Invest sufficient physical facilities, financial resources, and personnel to accept the business rights and secrets transferred by the franchisor;
- Accept the control, supervision, and guidance of the franchisor; comply with the requirements for designing, arranging sales locations, and supplying services of the franchisee;
- Keep confidential the business secrets that have been franchised, even after the franchise agreement ends or terminates;
- Cease using trademarks, trade names, business slogans, business symbols, and other intellectual property rights (if any) or the franchisor’s system when the franchise agreement ends or terminates;
- Operate activities in accordance with the franchise system;
- Not transfer the franchise rights without the franchisor’s approval.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top tier Franchise law firm in Vietnam. If you need any advice, please contact us for further information or collaboration.
