What are the characteristics of a franchise contract and what is the definition of a franchise contr

Legal analysis: The basic characteristics of a franchise contract that distinguishes it from other contracts are as follows: 1. The franchisor owns (including ownership and control) of the franchise or franchise.

2. The franchisor licenses the above concession as a whole to the franchisee. That is, it is not a transaction on a single intellectual property, but a transaction must be made in the entirety of the compound concession. 3. The franchisor collects royalties.

The franchise contract is a paid contract.

Legal basis: Article 3 of the Regulations of the People's Republic of China on the Administration of Commercial Franchise refers to the business activities of enterprises with registered trademarks, corporate logos, patents, proprietary technology and other business resources, which license their business resources to other operators in the form of contracts, and the franchisee carries out business activities in accordance with the contract in a unified business model, and pays franchise fees to the franchisor.

Banner Franchise answers your legal analysis:

A) having the franchisor qualification is a prerequisite for the franchisor to sign a franchise contract with the franchisee (also known as the franchisee). Therefore, the franchisor must be qualified, i.e., an enterprise that enjoys independent intellectual property rights or is qualified to authorize. At the same time, the two parties to the franchise are independent legal entities, responsible for their own profits and losses, at their own risk, and there is no affiliation.

2) The core of franchising is the granting of concessions. A franchise is a comprehensive right to use intellectual property rights, including trademarks, trade names, business models, service marks, patents, trade secrets, business know-how, etc. Therefore, the content of the franchise is an essential element of the franchise contract.

3) The franchise requires the franchisee and the franchisor to have common external characteristics. In other words, there must be clauses in the franchise contract that are set for the purpose of achieving a "unified business model". Such as:

The franchisee and the franchisor achieve a high degree of unity in brand, quality, trademark and business philosophy, and are uniform in terms of organizational system, business model and corporate image.

4) The franchisee must pay the corresponding franchise fee (also known as the franchise fee) to the franchisor. The franchise fee is the consideration for the franchisee to obtain the franchise qualification, and the franchisee can directly enjoy the successful business model of others after paying the fee, so the franchise fee is different from the advance payment in terms of legal nature.

Therefore, if an operating contract includes the above four basic elements, then we can consider it to be a "franchise contract".

Legal basis: "Regulations on the Administration of Commercial Franchises" Article 3 The term "commercial franchising" (hereinafter referred to as franchise) in these Regulations refers to the business activities of enterprises (hereinafter referred to as franchisees) that have registered trademarks, corporate logos, patents, proprietary technology and other business resources, and license their business resources to other operators (hereinafter referred to as franchisees) in the form of contracts, and the franchisee shall carry out business activities in accordance with the contract under a unified business model, and pay franchise fees to the franchisor.

Units and individuals other than enterprises shall not engage in franchising activities as franchisors.

A commercial franchise contract refers to a contract in which the franchisor authorizes the franchisee to grant a series of intangible property rights and exclusive rights owned by the franchisor such as trademarks (including service marks), trade names, service marks, patents, technical secrets, and business models owned by the franchisor to the franchisee and the franchisee themselves to make substantial investments in the business entity, and the franchisee pays royalties to the franchisor accordingly.

The franchise contract is an agreement between the parties to the franchise to establish changes or terminate the rights and obligations for the joint operation or termination of the franchise, and is the basis and key to the existence and development of the franchise system. The significance of the franchise contract is to clarify the rights and obligations between the parties, regulate the business behavior of the parties during the existence of the contract, and ensure the legitimate rights and interests of the parties, which is the main basis for resolving disputes between the franchisor and the licensee.

The basic characteristics of a franchise contract that distinguishes it from other contracts are as follows: 1. The franchisor owns (including ownership and control) of the franchise or franchise. 2. The franchisor licenses the above concession as a whole to the franchisee.

That is, it is not a single intellectual property right, but a transaction must be made in the entirety of the compound concession. 3. The franchisor collects royalties. The franchise contract is a paid deferred contract.

Laws and regulations: Article 3 of the Regulations of the People's Republic of China on the Administration of Commercial Franchise refers to the business activities of enterprises with registered trademarks, corporate logos, patents, proprietary technology and other business resources, which license other operators to use the business assets they own in the form of contracts, and the franchisee carries out business activities in accordance with the contract in a unified business model, and pays franchise fees to the franchisor.

The precautions for franchise contracts are that the parties to the contract must have the ability to conclude; The expression of intent to enter into a contract must be true and legal; It must not violate public order and good customs; As well as the first time to conclude a franchise contract, shall be filed with the competent department of commerce within 15 days.

[Legal basis].Article 143 of the Civil Code.

Civil juristic acts that meet the following conditions are valid:

1) The perpetrator has the corresponding capacity for civil conduct;

2) The meaning is genuine;

3) Do not violate the mandatory provisions of laws and administrative regulations, and do not violate public order and good customs.

Article 8 of the Regulations on the Administration of Commercial Franchises.

The franchisor shall, within 15 days from the date of the first conclusion of the franchise contract, file with the competent department of commerce in accordance with the provisions of these Regulations. Engaging in franchise activities within the scope of provinces, autonomous regions and municipalities directly under the Central Government, shall be filed with the competent department of commerce of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government; Engaging in franchise activities across provinces, autonomous regions and municipalities directly under the Central Government shall be filed with the competent department of commerce.

Franchise products or services, according to law shall be approved before operation, the franchisor shall also submit the relevant approval documents.

1) The franchise contract is a two-way contract, and the franchisor has the obligation to grant the franchisee for use, and the franchisee has the obligation to pay royalties to the franchisee.

b) The franchise contract is a paid contract.

3) The franchise contract is a promise contract, unless otherwise provided by law or otherwise agreed by the parties, the franchise contract shall be established when the parties reach an agreement on the expression of intent through the offer and commitment, and the performance of contractual obligations shall not be taken as an element of the formation of the contract.

Fourth) the franchise contract is an essential contract, according to the provisions of the Regulations, the franchisor and the franchisee should be in writing to conclude the franchise contract.