Enterprises that want to conduct franchising activities in Vietnam need to carry out registration procedures with authorities, except in certain cases.

This article was consulted by Lawyer Nguyen Quang Trung

Legal grounds:

• Commercial Law 2005;
• Decree No. 35/2006/ND-CP;
• Decree No. 120/2011/ND-CP.

We have received the following question:

Hello TLT Legal. I have a plan to return to Vietnam in the near future. I want to do business as a franchise for a foreign fast food company. Currently this brand is not present in Vietnam, so when my company established in Vietnam wants to receive a business franchise, does it have to be registered?

Enterprises in Vietnam can receive commercial franchises from foreign enterprises to Vietnam to do business. The condition to receive a business franchise in Vietnam is that the business system expected to be franchised must have been in operation for at least 1 year.

1. Register commercial franchising activities

Pursuant to Clause 1, Article 291 of the 2005 Commercial Law as follows:

Article 291. Registration of commercial franchise

1. Before franchising, the intending franchisor must register with the Ministry of Trade.

According to the above regulations, before franchising to other organizations or individuals, the franchisor must register commercial franchising activities with the Ministry of Industry and Trade.

However, based on Article 17a Decree 35/2006/ND-CP, supplemented by Decree 120/2011/ND-CP as follows:

Article 17a. Cases where franchise registration is not required

1. The following cases do not require franchise registration:
   1. Domestic franchising;
   2. Franchising from Vietnam to foreign countries.
2. For cases that do not require franchise registration, reporting to the Department of Industry and Trade must be implemented.

According to the above regulations: the subject who needs to register a franchise is the franchisor. If a franchisor in a foreign country wants to franchise in Vietnam, it must register a franchise at the Ministry of Industry and Trade. In particular, cases of domestic franchising and franchising from Vietnam to foreign countries are exempt from registration procedures but must still report to the Department of Industry and Trade.

2. Application for registration of commercial franchise

Pursuant to Article 19 of Decree No. 35/2006/ND-CP, amended by Decree No. 120/2011/ND-CP, the franchisor needs to submit a franchise registration application at the Ministry of Industry and Trade including:

1. Application for registration of commercial franchising according to regulated form.
2. Document of franchise introduction according to regulated form.
3. Documents confirming:
   1. Legal status of the franchisor;
   2. Certificate of protection of industrial property rights in Vietnam or abroad in case of transfer of rights to use industrial property objects that have been granted a certificate of protection.

Note: except for the registration application, other documents mentioned above must be consularly legalized.

If the application is valid, the Ministry of Industry and Trade will register it in the Franchise Activity Register and issue a notice to the registrant within 5 working days.