I. Definition of terminology
The franchise contract involves many professional issues such as law, management and technology. Some special terms appearing in the contract, such as management system, trademark license use, regional protection, franchise money, franchise fee, product and service content. Wait. Both parties to the franchise often have disputes due to different understandings of the above-mentioned specific terms. In order to avoid this situation, it is of great significance to clearly define the connotation and extension of these specific terms. If the franchise contract stipulates: “The management system refers to all valuable commercial names, trademarks, architectural styles, training systems, financial systems, operating know-how and know-how of the franchisor. Its core content is a certain trademark and its Management standards and technical quality standards."
2. Content, scope, time limit and region of the franchise license
Usually the contents of the franchise contract license include: the trademarks, trade names, patents, know-how and business decisions that are permitted to be used. The contract should clearly specify their name, registration number and other registration status, expiration date, content, method and area of ​​the license. When signing a contract, the franchisee should review the original of the ownership certificate. The scope of the license should clearly specify the time, place, method, and usage rights. The contract period is one year short, ten years long, and up to twenty years, usually three to five years. The length of the term is related to factors such as industry characteristics, investment size, and length of investment recovery. It is usually also stipulated under what circumstances the contract can be terminated early and under what circumstances the contract can be extended or renewed. For example, a franchise contract stipulates: “After the contract expires, if Party B (the franchisee) requests to extend the franchise, it shall submit a written application to Party A (the franchisor) one month before the expiration of the contract, and Party A agrees to continue The contract shall be renewed; if Party A does not agree or Party B does not apply, the contract shall be terminated."
The geographical area in which the concession is used usually refers to the geographical scope in which the franchisee has the right to use the franchise. It is usually used to limit the scope of the licensee's use of the concession. At the same time, it can also be used to limit the number of franchisees to develop franchisees in specific areas, to prevent the franchisees from greedy and unrestrained development of franchise stores, to avoid vicious competition within the franchise system, to endanger the health of the entire franchise system, and thus maintain The interests of the franchisee. For example, a franchise contract stipulates that “the franchisor promises not to develop other franchisees within a certain district of a certain province in a certain province during the validity period of the contract.â€
Third, the basic rights and obligations of the franchisor
According to Article 8 of the Measures for the Administration of Commercial Franchising (Provisional) of the former Ministry of Domestic Trade, the basic rights of the franchisor are:
First, in order to ensure the uniformity of the franchise system and the consistency of product and service quality, the franchisor has the right to supervise the business activities of the franchisee. This is one of the most basic rights of the franchisor. The power of supervision is the most basic and important means of maintaining the unity of the franchise system. The power of supervision is usually achieved through the implementation of supervision procedures and systems. The supervision procedures and systems are not identical, but their functions and purposes are consistent. For example, McDonald's adopted the "mystery consumer" means to check the quality of products and services that supervised the franchise stores, and the effect was very good.
Second, the right to charge the franchisee for franchise fees and other various services. Franchise fees refer to franchise fees and royalties, and some companies also charge a certain amount of margin. These fees are agreed in the franchise contract. Other various service fees usually include advertising fees, store design fees, special guidance service fees, agency fees, and so on. This part of the fee is usually agreed separately outside the franchise contract. The collection of fees reflects both the value of the franchise and the guarantor's guarantee and source of services for the franchisee.
Third, the franchisor has the right to terminate the franchise contract and revoke the franchise qualification of the franchisee for violation of the franchise contract provisions, infringement of the franchisor's legitimate rights and interests, and damage to the franchise system. This is the franchisor's right to terminate the contract. Because the form of the right to terminate the contract has a great influence on the franchisor, the design of the relevant clauses should be very careful. On the other hand, since the franchise system is a community of interests, the franchisor should fully estimate the adverse effects of the termination of the contract on the entire franchise system. It is not a last resort and should not use the right to terminate the contract.
According to Article 9 of the former Ministry of Internal Trade's "Management Measures for Commercial Franchising (Provisional)", the basic obligations of the franchisor are:
First, the franchise is granted to the franchisee and the business symbol and business manual representing the franchise system are provided. The basis for granting the franchise is the franchise contract. Formally, a symbolic authorization ceremony or an authorization certificate is usually issued. The business symbol is usually the unified store design of the franchise system, unified signboards, promotional items, work clothes, business methods, etc. The operation manual refers to the "single store business manual" and the "VI manual".
Second, provide pre-opening education and training. Education and training are usually arranged by the franchisor. If the franchisee has special requirements, the two parties will negotiate separately.
Third, guide the franchisees to prepare for the store. Usually the franchisor provides the franchisee with services such as store selection, store design, advertising planning, opening ceremony planning, equipment installation height, item procurement, and employee recruitment.
Fourth, provide long-term business guidance, training and contractual supply of goods.
4. The basic rights and obligations of the franchisee
According to Article 10 of the Measures for the Administration of Commercial Franchising (Provisional) of the former Ministry of Internal Trade, the basic rights of the franchisee are:
First, exercise the rights granted by the franchisor within the scope of the contract. Here mainly refers to the training and guidance of the franchisor, using the trademark, trade name, patent, management experience of the franchisor to engage in business activities.
Second, the right to obtain the business technology and trade secrets provided by the franchisor. This is an important purpose for franchisees to purchase franchise rights, but both parties should make a clear agreement on how to properly use business technology and trade secrets.
Third, the right to obtain training and guidance provided by the franchisor. The franchisor should arrange for the training personnel to make full use of the training opportunities to improve their management level. In addition, the franchisor's acceptance of the franchisor's guidance is an important condition for maintaining the entire franchise system, and the franchisee should have a correct understanding. In this sense, accepting the franchisor's guidance is not only the rights of the franchisee, but also the obligation.
According to the provisions of Article 11 of the Measures for the Administration of Commercial Franchising (Provisional) of the former Ministry of Domestic Trade, the basic obligations of the franchisee are:
First, it is obliged to conduct business activities in strict accordance with the standards stipulated in the contract.
A franchise contract usually stipulates that the franchisee must conduct business activities in the manner prescribed by the Single Store Operation Manual to maintain the standards and uniformity of the franchise system.
Second, it is obliged to strictly require the contract to pay royalties and other various fees. At present, the franchisees have some problems in paying royalties, mainly in terms of not paying fees on time and providing false financial statements to reduce the amount of contributions. The franchisor's countermeasures are: collecting the deposit, if the franchisor delays the payment of the usage fee, the franchisor can use the margin to offset; then the financial system is improved, and the financial supervision of the franchisee is strengthened; if financial supervision is difficult, a quota can be adopted. Pay the franchise usage fee instead of paying proportionally.
Third, it is obliged to maintain the reputation and unified image of the franchise system.
Maintaining the reputation and unified image of the franchise system is not only a requirement of the franchisor, but also related to the franchisee's own interests. In the franchise system, problems such as a franchise store will affect the entire franchise system. For example, in a certain franchise store in Shenzhen, the “deaf finger incident†quickly affected the entire system, and the turnover of all franchise stores in the system dropped sharply.
Fourth, the obligation to accept the guidance and supervision of the franchisor In the franchise system contract, the basic rights and obligations of the franchisor and the franchisee are corresponding, respectively reflected in different terms. For example, in the franchise system, training terms, various fees and terms of payment, supervision and guidance clauses, confidentiality clauses, insurance clauses, trademark patent license terms, restrictions on competition clauses, etc.
V. Training and guidance for franchisees
The training and guidance of the franchisee is an important means to ensure the integrity and harmonization of the franchise system. The franchise contract should clearly stipulate the contents and methods of training and guidance, and the commitment of related expenses. Training instructions usually include pre-opening staff training, store selection, store design, marketing planning, and support after opening. For example, a franchise contract stipulates: “(the franchisor) provides professional training for the technical backbone personnel before the job, and retrains regularly.†At the same time, it stipulates: “(the franchisor) has the right to franchise at any time in various forms. Inspection, supervision, appraisal and assessment of service quality and product quality. In business guidance, there is an obligation to help the franchisee to solve management and technical problems in production and operation." It also stipulates: "Party B (the franchisee) will send its relevant personnel to receive training and assessment of the training center of the company before the opening of the franchise store, and may be employed after obtaining the training certificate of Party A.
For the franchisee, obtaining training and guidance is an important right of oneself. When signing the contract, the training plan, teaching materials, location, teacher composition, etc. must be clearly understood and detailed in the contract.
The franchise contract involves many professional issues such as law, management and technology. Some special terms appearing in the contract, such as management system, trademark license use, regional protection, franchise money, franchise fee, product and service content. Wait. Both parties to the franchise often have disputes due to different understandings of the above-mentioned specific terms. In order to avoid this situation, it is of great significance to clearly define the connotation and extension of these specific terms. If the franchise contract stipulates: “The management system refers to all valuable commercial names, trademarks, architectural styles, training systems, financial systems, operating know-how and know-how of the franchisor. Its core content is a certain trademark and its Management standards and technical quality standards."
2. Content, scope, time limit and region of the franchise license
Usually the contents of the franchise contract license include: the trademarks, trade names, patents, know-how and business decisions that are permitted to be used. The contract should clearly specify their name, registration number and other registration status, expiration date, content, method and area of ​​the license. When signing a contract, the franchisee should review the original of the ownership certificate. The scope of the license should clearly specify the time, place, method, and usage rights. The contract period is one year short, ten years long, and up to twenty years, usually three to five years. The length of the term is related to factors such as industry characteristics, investment size, and length of investment recovery. It is usually also stipulated under what circumstances the contract can be terminated early and under what circumstances the contract can be extended or renewed. For example, a franchise contract stipulates: “After the contract expires, if Party B (the franchisee) requests to extend the franchise, it shall submit a written application to Party A (the franchisor) one month before the expiration of the contract, and Party A agrees to continue The contract shall be renewed; if Party A does not agree or Party B does not apply, the contract shall be terminated."
The geographical area in which the concession is used usually refers to the geographical scope in which the franchisee has the right to use the franchise. It is usually used to limit the scope of the licensee's use of the concession. At the same time, it can also be used to limit the number of franchisees to develop franchisees in specific areas, to prevent the franchisees from greedy and unrestrained development of franchise stores, to avoid vicious competition within the franchise system, to endanger the health of the entire franchise system, and thus maintain The interests of the franchisee. For example, a franchise contract stipulates that “the franchisor promises not to develop other franchisees within a certain district of a certain province in a certain province during the validity period of the contract.â€
Third, the basic rights and obligations of the franchisor
According to Article 8 of the Measures for the Administration of Commercial Franchising (Provisional) of the former Ministry of Domestic Trade, the basic rights of the franchisor are:
First, in order to ensure the uniformity of the franchise system and the consistency of product and service quality, the franchisor has the right to supervise the business activities of the franchisee. This is one of the most basic rights of the franchisor. The power of supervision is the most basic and important means of maintaining the unity of the franchise system. The power of supervision is usually achieved through the implementation of supervision procedures and systems. The supervision procedures and systems are not identical, but their functions and purposes are consistent. For example, McDonald's adopted the "mystery consumer" means to check the quality of products and services that supervised the franchise stores, and the effect was very good.
Second, the right to charge the franchisee for franchise fees and other various services. Franchise fees refer to franchise fees and royalties, and some companies also charge a certain amount of margin. These fees are agreed in the franchise contract. Other various service fees usually include advertising fees, store design fees, special guidance service fees, agency fees, and so on. This part of the fee is usually agreed separately outside the franchise contract. The collection of fees reflects both the value of the franchise and the guarantor's guarantee and source of services for the franchisee.
Third, the franchisor has the right to terminate the franchise contract and revoke the franchise qualification of the franchisee for violation of the franchise contract provisions, infringement of the franchisor's legitimate rights and interests, and damage to the franchise system. This is the franchisor's right to terminate the contract. Because the form of the right to terminate the contract has a great influence on the franchisor, the design of the relevant clauses should be very careful. On the other hand, since the franchise system is a community of interests, the franchisor should fully estimate the adverse effects of the termination of the contract on the entire franchise system. It is not a last resort and should not use the right to terminate the contract.
According to Article 9 of the former Ministry of Internal Trade's "Management Measures for Commercial Franchising (Provisional)", the basic obligations of the franchisor are:
First, the franchise is granted to the franchisee and the business symbol and business manual representing the franchise system are provided. The basis for granting the franchise is the franchise contract. Formally, a symbolic authorization ceremony or an authorization certificate is usually issued. The business symbol is usually the unified store design of the franchise system, unified signboards, promotional items, work clothes, business methods, etc. The operation manual refers to the "single store business manual" and the "VI manual".
Second, provide pre-opening education and training. Education and training are usually arranged by the franchisor. If the franchisee has special requirements, the two parties will negotiate separately.
Third, guide the franchisees to prepare for the store. Usually the franchisor provides the franchisee with services such as store selection, store design, advertising planning, opening ceremony planning, equipment installation height, item procurement, and employee recruitment.
Fourth, provide long-term business guidance, training and contractual supply of goods.
4. The basic rights and obligations of the franchisee
According to Article 10 of the Measures for the Administration of Commercial Franchising (Provisional) of the former Ministry of Internal Trade, the basic rights of the franchisee are:
First, exercise the rights granted by the franchisor within the scope of the contract. Here mainly refers to the training and guidance of the franchisor, using the trademark, trade name, patent, management experience of the franchisor to engage in business activities.
Second, the right to obtain the business technology and trade secrets provided by the franchisor. This is an important purpose for franchisees to purchase franchise rights, but both parties should make a clear agreement on how to properly use business technology and trade secrets.
Third, the right to obtain training and guidance provided by the franchisor. The franchisor should arrange for the training personnel to make full use of the training opportunities to improve their management level. In addition, the franchisor's acceptance of the franchisor's guidance is an important condition for maintaining the entire franchise system, and the franchisee should have a correct understanding. In this sense, accepting the franchisor's guidance is not only the rights of the franchisee, but also the obligation.
According to the provisions of Article 11 of the Measures for the Administration of Commercial Franchising (Provisional) of the former Ministry of Domestic Trade, the basic obligations of the franchisee are:
First, it is obliged to conduct business activities in strict accordance with the standards stipulated in the contract.
A franchise contract usually stipulates that the franchisee must conduct business activities in the manner prescribed by the Single Store Operation Manual to maintain the standards and uniformity of the franchise system.
Second, it is obliged to strictly require the contract to pay royalties and other various fees. At present, the franchisees have some problems in paying royalties, mainly in terms of not paying fees on time and providing false financial statements to reduce the amount of contributions. The franchisor's countermeasures are: collecting the deposit, if the franchisor delays the payment of the usage fee, the franchisor can use the margin to offset; then the financial system is improved, and the financial supervision of the franchisee is strengthened; if financial supervision is difficult, a quota can be adopted. Pay the franchise usage fee instead of paying proportionally.
Third, it is obliged to maintain the reputation and unified image of the franchise system.
Maintaining the reputation and unified image of the franchise system is not only a requirement of the franchisor, but also related to the franchisee's own interests. In the franchise system, problems such as a franchise store will affect the entire franchise system. For example, in a certain franchise store in Shenzhen, the “deaf finger incident†quickly affected the entire system, and the turnover of all franchise stores in the system dropped sharply.
Fourth, the obligation to accept the guidance and supervision of the franchisor In the franchise system contract, the basic rights and obligations of the franchisor and the franchisee are corresponding, respectively reflected in different terms. For example, in the franchise system, training terms, various fees and terms of payment, supervision and guidance clauses, confidentiality clauses, insurance clauses, trademark patent license terms, restrictions on competition clauses, etc.
V. Training and guidance for franchisees
The training and guidance of the franchisee is an important means to ensure the integrity and harmonization of the franchise system. The franchise contract should clearly stipulate the contents and methods of training and guidance, and the commitment of related expenses. Training instructions usually include pre-opening staff training, store selection, store design, marketing planning, and support after opening. For example, a franchise contract stipulates: “(the franchisor) provides professional training for the technical backbone personnel before the job, and retrains regularly.†At the same time, it stipulates: “(the franchisor) has the right to franchise at any time in various forms. Inspection, supervision, appraisal and assessment of service quality and product quality. In business guidance, there is an obligation to help the franchisee to solve management and technical problems in production and operation." It also stipulates: "Party B (the franchisee) will send its relevant personnel to receive training and assessment of the training center of the company before the opening of the franchise store, and may be employed after obtaining the training certificate of Party A.
For the franchisee, obtaining training and guidance is an important right of oneself. When signing the contract, the training plan, teaching materials, location, teacher composition, etc. must be clearly understood and detailed in the contract.
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