You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

November 26, 2019

Franchising in Cambodia

Subscribe to Updates
Franchising Insider

This article was first published on Franchising Insider—a blog maintained by US Law Firm Quarles & Brady LLP—and was co-authored by Jay Cohen, partner and director of Tilleke & Gibbins’ Phnom Penh office; Mealtey Oeurn, an advisor in Tilleke & Gibbins’ Phnom Penh Office; and Robert A. Smith, a partner in the Washington, DC, office of Quarles & Brady LLP.

Introduction

Cambodia has a rapidly growing economy with a sustained impressive growth rate of 7.7% between 1995 and 2018 (World Bank, Cambodia Overview). During that time, Cambodia has transitioned from being classified by the World Bank as a low-income country to a lower middle-income country. In addition, a sizable middle class had developed, particularly in Phnom Penh. Along with economic growth, an expanding middle class, and a welcoming investment framework, Cambodia has witnessed the entrance of a number of international franchises, including Burger King, Carl’s Jr., Circle K, Cold Stone Creamery, Domino’s Pizza, Krispy Kreme, L’Occitane, Levi’s, Lotteria, Pandora, and Starbucks, among others.

Regulation

Cambodia has not enacted any comprehensive franchise laws; therefore, franchising is largely governed by laws of general application that implicate franchise issues. While the Ministry of Commerce is in the midst of developing a Law on Commercial Contracts, which purportedly contains a section on franchise agreements, there is no clear timeline for the enactment of this law. In the meantime, franchising is primarily governed by the following laws:

  • The Civil Code
  • The Law Concerning Marks, Trade Names and Acts of Unfair Competition (Trademark Law)
  • The Notification on the Recordal of License Contracts and Franchise Contracts, dated March 12, 2015 (Franchise Contract Notification)

For franchise agreements prepared in a foreign jurisdiction, franchisors should carefully localize the following provisions to ensure they are enforceable in Cambodia:

  • Dispute resolution clauses
  • Intellectual property provisions
  • Guarantee provisions
  • Non-complete obligations
  • Real estate provisions
  • Tax related clauses

In particular, under Article 19 of the Trademark Law, any license agreement for trademarks, including a franchise agreement that contains a trademark license, must impose on the licensor an obligation to effectively control the quality of the goods or services in connection with the mark, otherwise, the contract will not be valid.

In theory, the Trademark Law requires all trademark license agreements to be registered with the Department of Intellectual Property Rights (DIPR). However, in practice, it is only necessary to register a trademark license agreement, or a franchise agreement that contains a trademark license, if the licensor wants to allow the licensee the right to enforce the agreement against third parties (e.g., persons in Cambodia infringing the licensor’s trademarks).

Disclosure and Misrepresentation

While Cambodian law does not require pre-contract disclosure, all information provided in a franchise agreement must be accurate. Under the Civil Code, if a party enters into a contract on the basis of another party’s misrepresentation, that party is entitled to rescind the contract and seek damages from the party who made the misrepresentation. In addition, under the same legislation, a personal guarantee is invalid if the guarantor was not fully informed of all material information regarding the guaranteed obligation at the time that the guarantee was signed.

Intellectual Property

Franchisors typically grant franchisees the right to use trademarks, systems, logos, advertisements, and know-how in connection with the franchised business. Registration issues related to the grant of rights in trademarks, patents and industrial designs, and copyrights, registration issues are discussed below.

Trademarks

Trademark owners are encouraged to register their trademarks with the DIPR to receive protection under Cambodian law. To maintain registration and to avoid cancellation, the owner of the trademark must file an Affidavit of Use/Non-Use for the mark within one year following the fifth anniversary of the date of registration, or within one year following the fifth year from the renewal date (if the registration has already been renewed). A trademark is registered for a term of 10 years from the date of filing the application and can be renewed every 10 years. If the trademark registration is not renewed, trademark protection will lapse. In 2015, Cambodia became a member of the Madrid Protocol, thus trademark rights holders can initiate a trademark registration application at their national or regional intellectual property office, if that country is also a party to the system.

Patent and Industrial Designs

Patent and industrial design licenses must be registered with the Ministry of Industrial and Handicrafts. In addition, Cambodia has entered into international agreements with China, the European Union, and Singapore on validating patents first registered in those countries.

Copyrights

Foreign copyrights are generally not protected in Cambodia unless the work is (i) created by a person who is resident in Cambodia, (ii) created by a person who is a legal person with a registered office in Cambodia, or (iii) first published abroad and is registered in Cambodia within 30 days of the first communication to the public. Therefore, franchisors should understand that manuals and other similar materials may not be protected in Cambodia through copyrights, and other means of protection (i.e., by way of trade secrets) should be sought.

Competition Law

Cambodia does not currently have any specific competition legislation. Although the Ministry of Commerce is currently working on a draft Competition Law, there is no timeline for its enactment.  Even though there is no competition law in Cambodia, it is common for foreign companies to insert non-competition provisions in their franchise agreements to restrict franchisees from engaging in any activities that compete with the franchisor.

Choice of Law and Dispute Resolution

Choosing a foreign country’s law as the governing law for a franchise agreement does not contravene Cambodian law. In practice, however, local courts may be unwilling to apply foreign law to disputes before them. In addition, certain issues (i.e., advertisement approval requirements, real estate and zoning) can only be governed by Cambodian law.

Foreign franchisors should carefully consider the dispute resolution mechanism in their franchise agreements. Foreign court judgments are not enforceable in Cambodia, unless, among other requirements, there is a guarantee of reciprocity between Cambodia and the foreign country in which the court is based. To date, Cambodia has only entered into such an agreement with Vietnam, meaning that virtually all foreign court judgments will not be enforceable in Cambodia.

Cambodia is, however, a member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and foreign arbitration awards are, therefore, enforceable in Cambodia. Cambodia also has its own domestic arbitration institution called the National Commercial Arbitration Center. Accordingly, arbitration is the preferred method of dispute resolution in Cambodia.

Related Professionals

Practices

Corporate/M&A

Intellectual Property

Location

RELATED INSIGHTS​ 

August 13, 2026
Modern agricultural machinery is no longer purely mechanical but instead technology dependent. Modern tractors, harvesters, and other farm equipment increasingly incorporate embedded software, electronic control units, sensors, and digital diagnostic systems. While such technologies enhance efficiency, productivity, and precision farming, they also affect the manner of equipment repair and maintenance. As a result, farmers and independent repair providers may have little practical choice but to rely on authorized dealers, even for routine maintenance and repairs. Section 36 of Thailand’s Patent Act reflects the principle that the authorized sale of a patented invention usually exhausts the exclusive right of the patent owner over the specific product. This means that upon legal sale of the patented product, it can typically be used or resold without further authorization from the patent holder. This principle is relatively straightforward when applied to traditional mechanical equipment. Ownership of a machine ordinarily carries with it the practical ability to diagnose faults, replace worn parts, and restore the equipment to working order. Modern agricultural machinery, however, increasingly depends on embedded software, proprietary diagnostic systems, firmware updates, and other digital resources that may remain under the control of the manufacturer or patent holder. This tension lies within the “right to repair” debate. In the United States, on July 8, 2026, the Federal Trade Commission and five states announced a settlement with Deere & Company resolving allegations that Deere had unlawfully restricted farmers’ and independent repair providers’ ability to repair their equipment. Under the terms of the settlement, for the next ten years, Deere must provide repair resources, including software capabilities, on terms equivalent to those provided to authorized dealers. The Deere settlement highlights that the nature of ownership is changing, but legal concepts have not kept pace. Traditional patent-law concepts, including patent exhaustion, were developed with physical products
Read More
August 11, 2026
Cambodia’s Ministry of Justice has launched a new platform on its official website to publish notices of forced sales issued by each municipal and provincial court of first instance. The platform’s stated purpose is to inform the public and facilitate greater participation in forced-sale auctions conducted in connection with court-ordered enforcement proceedings. How the Platform Works The platform publishes forced-sale notices from courts of first instance across Cambodia’s municipalities and provinces and includes a link where the public can view properties currently subject to forced sale. To participate in a forced-sale auction, individuals can download Khmer-language bidding application forms through links provided on the platform. The form typically requires the applicant’s name, sex, year of birth, identity card number and issue date, and address, together with details identifying the immovable property (including its ownership certificate number), the relevant enforcement case number and date, and the reference to the public auction or tender announcement issued by the court. Completed application forms must be submitted directly to the specific municipal or provincial court that issued the forced sale. For further inquiries about a particular forced sale, interested parties should likewise contact the relevant municipal or provincial court. Forced Sale of Immovable Property in Cambodia The publication of these notices relates to the forced sale procedure for immovable property under Cambodia’s Code of Civil Procedure (CPC). Unlike property seizure by a court, a forced sale is a compulsory execution proceeding—a subsequent enforcement step that arises only after an underlying dispute has been adjudicated and a debtor fails to pay the debt or outstanding amount due under a final and binding judgment or other enforceable title of execution. For the purposes of this procedure, the term “immovable property” under the CPC refers to land, registered buildings, jointly held shares of such property, registered
Read More
August 10, 2026
Thailand has finalized its social media KYC (“know your customer”) rules under Notification of the Electronic Transactions Commission on Measures to Prevent Technological Crimes for Social Media Service Providers (No. 2), which was published in the Government Gazette on May 5, 2026, and will take effect on November 1, 2026. While an early draft of the notification proposed requiring social media platforms to arrange identification of every user account, the final notification is significantly more targeted, focusing on paid online advertising and advertiser identity verification. Though the regulatory initiative primarily aims to combat online fraud and technology-related crimes, it also has important consequences for intellectual property enforcement, because the verified platform records that will be generated under the new requirements can help IP rights holders to identify anonymous online infringers. Key Regulatory Mandates The notification requires social media service providers to verify the identity of advertisers before their paid advertisements are published and disseminated in Thailand through social media, regardless of whether the advertising fees come from the advertisers or third parties. Verification of an advertiser is valid for one year, after which verification would have to be performed again before the platform could publish additional paid advertisements from the advertiser. Permitted verification methods are specified under the notification. A platform may verify an advertiser by checking identity evidence and confirming the connection between the advertiser and that identity evidence, with the notification giving facial comparison against certain government-issued identity documents as an example. Alternatively, platforms may verify advertisers through a digital identity verification and authentication system with an identity-proofing assurance level not lower than the level prescribed by Thailand’s Electronic Transactions Commission. The notification further requires platforms to retain only the advertiser’s information necessary to identify the advertiser, beginning from the start of the advertising activity and for
Read More
August 6, 2026
Introduction: A Trademark Paradox in Sustainable Packaging Walk into any Thai supermarket, and the label-free water bottle is no longer a novelty. Thailand’s packaging market, valued at approximately USD 15.68 billion in 2025, is shifting toward minimalist, plastic-light designs as ESG pressures reshape how brands present their products. The country generated roughly 5.68 million tons of plastic waste in 2021, with a recycling rate of only 19 percent, and regulators are now considering rules that would allow label-free bottled water relying on embossing, laser printing, or QR codes instead of wrap-around labels. As packaging itself becomes the brand identifier, a paradox emerges: designs built to say the least often struggle hardest for protection under Thai intellectual property law. The Trademark Barrier: When Shape Is Not Enough Section 7, paragraph 2(10) of the Thai Trademark Act deems a shape distinctive only if it is not the natural form of the goods, is not necessary to achieve a technical result, and does not add value to the goods. The Department of Intellectual Property’s 2022 examination guidelines apply this test conservatively, as the following examples illustrate. A plain water bottle relying on subtle contours to signal its brand is typically read as just another bottle, not a source identifier. Acquired distinctiveness offers a theoretical escape route, but it demands extensive evidence of sales, advertising, and consumer recognition—an especially heavy burden for new entrants whose minimalist packaging has not yet achieved market prominence. The result is a structural bias against precisely the design innovation that sustainability goals are meant to encourage. Design Patents: A Partial, Imperfect Substitute Design patent protection, covering a product’s shape, configuration, or ornamentation, appears to offer an alternative route. In practice, it is constrained by the same forces driving the minimalist trend. Because many brands converge on similar solutions—clear
Read More