Establishment of Franchising Enterprises

An Expert's View about Distribution Networks in China

Last updated: 22 Feb 2011

4-3 Establishment of Franchising Enterprises and Procedures for Opening Stores

The establishment procedures are the same as those for foreign-invested wholesale enterprises. Under existing policies, FIEs engaging in commercial franchising are treated in the same way as domestic enterprises with regard to establishment requirements, rights and obligations, information disclosure, advertising and publicity etc, but are different in terms of establishment procedures. Approval procedures carried out by the examination and approval authorities are merely a matter of formality.
FIEs that are qualified to engage in franchising should apply to their original examination and approval authorities for permission to add "engaging in commercial activities in the form of franchising" to their business scope and submit the necessary documents, including information disclosure document, sample of franchising contract and operation manual of franchising. The examination and approval authorities will make a decision in writing on whether or not to approve the application within 30 days after receiving the complete set of application materials. Upon obtaining approval and completing the necessary formalities in respect of change of registration details with the industry and commerce administration, the FIEs may start their franchising business.

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Posted: 21 February 2011, last updated 22 February 2011

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