Opinion: Transparency boost for franchising

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clpstaff &clp articles

MOFCOM's latest bid to strengthen commercial franchising will protect trade secrets and increase fines for providing false information during promotional activities. The Measures represent China's commitment to regulating this large, but young market


On February 23 2012, the Ministry of Commerce (MOFCOM) issued the Measures for the Administration of Information Disclosure in Connection with Commercial Franchising (商業特許經營信息披露管理辦法), which will come into effect on April 1 2012. The measures follow China's policies on “strengthening the regulation of commercial franchising activities” set out in Article 2.1 of the Guiding Opinion of the Ministry of Commerce on Further Promoting the Healthy Development of Franchises during the 12th Five-year Plan (关于“十二五”期间促进商业特许经营健康发展的指导意见). The Measures will enhance the legal liabilities of franchisors to disclose certain information in commercial franchise activities, slightly enlarging the scope of disclosure and further strengthening protection of trade secrets. Below is a summary of the main changes:

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