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China Further Streamlines its Franchise Regime

China Insight - Consumer Products

01/06/2011

In the past, Chinese law requires a foreign franchisor must operate at least two self-owned stores within China for more than one year before they can franchise their brands or services to local Chinese franchisees. In practice, this means that foreign franchisors will have to set up a retail company in China for one year before they can legally start to franchise. The situation improved in 2007 after a new franchise regulation made it possible for a foreign franchisor to satisfy the “two stores, one year” requirement if it has operated two self-owned stores in its home country or other markets. This liberated China’s retail sector and contributed to the later blooming of franchise in China.

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China Insight - China Further Streamlines its Franchise Regime
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Authors

Lichtenstein
Dr. Falk Lichtenstein
Partner
Beijing