Franchise Agreement Hong Kong

A franchise is a business in which the owners or „franchisees“ authorize the use of their logo, name, brand and other intellectual property rights, as well as their business model and any information necessary for the operation of the business, in third-party retail businesses owned by independent operators designated as „franchisees“. The franchisor receives pre-arranged lump sum payments (or entrance fees) for each new point of sale and royalties usually based on the turnover of the franchise. The termination of a franchise agreement is a matter of contract and should follow the termination clause of the contract. Under customary law, the parties have the right to terminate the contract in the event of a wrongful breach and if it is clear that the injuring party does not intend to abide by the agreement. Licensing agreements are generally not subject to special rules. A franchisee is unlikely to be considered an employee of a franchisee. To be considered a worker, one must enter into a contract of employment in which one person agrees to employ another and another agrees to serve his employer as a worker. Where a franchisee is considered to be the franchisee`s worker, the franchisee would be entitled to the minimum legal protection and benefits provided for in the Employment Regulation22 (for example. B statutory rest days, compulsory payments from provident funds and workers` compensation insurance).

In June 2012, Hong Kong adopted its first law on cross-sectoral competition, the Competition Regulation24 The Competition Regulation aims to prohibit (1) cooperation agreements and agreements, restrict competition (price fixing, limitation of the supply of price increases, distribution of market segments among competitors, etc.); and (2) prohibit the misuse of significant market power to restrict competition. The Competition Regulation entered into force on 14 December 2015. The law is implemented by the Competition Commission25 The franchised business model extends over agreements and an operating model. The franchise agreement is signed between the business model of another independent company (the franchisee) and a company (franchisor) that grants the use of its brand. In an agreement, both parties will meet their own legal requirements, which meet several operational criteria, and will be essential to them: as a leading service platform and a free or service-oriented economy, Hong Kong is an attractive site to create a franchise for many entrepreneurs. However, be sure to do the market research and analysis before signing a franchise agreement in Hong Kong. Another requirement under franchise laws and regulations is that a franchisee must provide an exhaustive list of the items to be disclosed before signing the franchise agreement. At least 30 days before the conclusion of the franchise agreement, the franchisee must make available to the franchisee: – activities such as the food and beverage and fast food or catering sectors, retail and convenience stores are activities known to Hong Kong franchises.

If you are interested in starting a business in Hong Kong, make the right choice with your hard-earned money and time and go to Startupr for the registration and establishment of your franchise business. Hong Kong`s high per capita income and legal framework have attracted many foreign franchisees to set up their sub-franchise in the city. Indeed, opening a franchise in Hong Kong is relatively simple, as there are no specific foreign exchange controls, no legislation on franchising transactions, no foreign equity participation, and no local rules for participation in management. . . .