China: Expansion and Refinement of Franchise Regulatory Requirements

In an effort to promote and regulate the rapid development of commercial franchising in China, the Chinese Ministry of Commerce (“MOFCOM”) issued three sets of releases earlier this year that expand and refine franchise disclosure and filing requirements in China. On January 4, 2012, MOFCOM released the Guiding Opinions on Promoting the Healthy Development of Commercial Franchising during the Twelfth Five-year Period (the “Guiding Opinions”). MOFCOM indicates in the Guiding Opinions that they would improve the laws, regulations, and standards of commercial franchising in China, and among other things, would improve the Measures for the Administration of Record Filing of Commercial Franchises (“2007 Record Filing Measures”) and the Measures for the Administration of Information Disclosure in Connection with Commercial Franchising (“2007 Information Disclosure Measures”), both of which MOFCOM issued in 2007. MOFCOM’s amended 2007 Record Filing Measures (“2012 Record Filing Measures”) took effect on February 1, 2012. The amended 2007 Information Disclosure Measures (“2012 Information Disclosure Measures”) took effect on April 1, 2012.

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