Jurisdiction - China
China Amends the Measures for Disclosure of Franchise Information.


31 March, 2012


Legal News & Analysis – Asia Pacific – China – Corporate/M&A



On February 23, 2012, the Ministry of Commerce issued the amended Measures for Administration of Disclosure of Commercial Franchise Information, which will take effect on April 1, 2012 and supersede the Measures for Administration of Disclosure of Commercial Franchise Information issued in 2007. The amended measures clarify that those shareholders who are natural persons are affiliate parties of a franchisor, and that their relevant information shall be disclosed to franchisees if they are the providers of products or services or the owners of business resources.  In addition, franchisors are obliged to disclose the business status of existing franchisees, including their actual investment, average sales volume, cost, gross and net profit etc.  According to the amended measures, if a franchisee knows business secrets of a franchisor as a result of their contractual relationship, the franchisee is required to keep such business secrets confidential after the expiry of the franchise contract, even if no specific agreement has been made to this effect.


The full Chinese text of the notice is available here.  




For further information, please contact:


Elizabeth Cole, Partner, Orrick

Thomas Man, Partner, Orrick
Brad Herrold, Orrick
Veronica Lockyer, Orrick
Yan Zeng, Orrick




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