FRANCHISING

Question:

Dear, DTD & ASSOCIATES LLP, I have an issue: I am a foreigner and owner of a milk tea brand which I founded. Now, my friend has intentions in doing milk tea  business and wants to get this franchise from my company.  So, can I franchise for my friend and how do I register franchise in Vietnam? Thank you!

Answer:

Hello, Thanks for your trust and sending the questions which you want to be consulted to Legal counsel department of DTD Law Firm. After reading and analyzing your question, we would like to give you the consultation as follows:

1. The Legal grounds:

- Commercial Law No.36/2005/QH11 of National Assembly of the Socialist Republic of Vietnam issued on June 14, 2005.

- Decree No. 35/2006 / ND-CP of the Government of the Socialist Republic of Vietnam, detailing the Commercial Law regarding franchise activities, issued on March 31, 2006.

- Decree No. 08/2018/ND-CP of the Government of the Socialist Republic of Vietnam, on amendments to certain decrees related to business conditions under state management of the Ministry of Industry and Trade, issued on January 15, 2018,

- Circular No. 09/2006 / TT-BTM of the Ministry of Trade, guiding the commercial franchising registration, issued on May 25, 2006.

- Other relevant documents.

According to Article 2(1) Decree No. 35/2006 / ND-CP, both Vietnamese traders and foreign traders can participate in franchise activities.

(“1. This Decree applies to Vietnamese traders and foreign traders involved in franchising.”).

+ Moreover, Article 8 Decree No. 08/2018/ND-CP on conditions for "franchisee" is as follows:

“The franchisor shall be entitled to franchise a business if it has been operating for at least 1 year.”