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

September 25, 2012

Getting the Deal Through – Franchise 2013, Vietnam Chapter

Subscribe to Updates
Law Business Research

With regulatory changes occurring in Vietnam to promote foreign investment, familiarity with the law on franchising in Vietnam is imperative to strategic decision-making for all types of investors, ranging from foreign companies to entrepreneurs. Getting the Deal Through has published a multi-jurisdictional guide to franchising in 33 different countries worldwide. The Vietnam chapter was written by Thom Thi Mai Nguyen and Huong Thi Thanh Nguyen, attorneys-at-law at the Tilleke & Gibbins corporate and commercial team in Vietnam, and covers the following:

A general overview: the forms of business entities that are relevant to the typical franchisor, the laws and agencies governing the formation of business entities, and the relevant aspects of the real estate market.

Legal requirements: The requirements for forming and maintaining a business entity, any restrictions that may apply to foreign business entities and foreign investments, labor and employment requirements, including any risks involved, and protecting intellectual property, particularly trademarks.

The offer and sale of franchises: The legal definition of a franchise, how the Commercial Law Decree 35/2006/ND-CP and Circular 09/2006/TT-BTM regulate the offer and sale of franchises, with reference to specific provisions and parts of the franchising procedure, any exemptions and exclusions, pre-contractual disclosure laws, a brief description about liabilities in sub-franchising, and what action to take if a franchisor engages in fraudulent practices in connection with the offer and sale of franchises.

Legal restrictions on terms of franchise contracts and the franchise relationship: Specific laws regulating the franchise relationship, even after the contract comes into effect, and the effect of intellectual property law, commercial law, real estate law, competition law, and government or trade association policies on the franchise relationship.

Termination of the franchise relationship: The circumstances under which a franchisor may terminate the relationship, including legal restrictions on their ability to do so, circumstances in which a franchisee may terminate the relationship, and renewal of the franchise agreement by the franchisor.

General aspects of the franchise relationship: Whether the franchisor can restrict a franchisee’s ability to transfer ownership interests, laws affecting the nature, amount, or payment of fees, restrictions on the amount of charges on overdue payments, laws regulating the currency of payments, and the law on good faith in the franchise relationship.

Dispute resolution relevant to franchising: A brief overview of the court system, the procedures available for dispute resolution for franchise cases, the advantages and disadvantages of arbitration for foreign franchisors considering business in Vietnam, and the difference between foreign and domestic franchisors.

This edition of Getting the Deal Through – Franchise is one volume in a series of annual reports, all of which provide analysis of key areas of the law globally for corporate counsel and legal practitioners.

Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through – Franchise 2013 (published in August 2012; contributing editor: Phil Zeidman of DLA Piper (US) LLP). For further information please visit www.GettingTheDealThrough.com.

Download Full Article
Related Professionals

Practices

Corporate/M&A

Intellectual Property

Location

RELATED INSIGHTS​ 

December 4, 2024
Thailand Legal Basics, a valuable primer for foreign investors, explores all aspects of living and doing business in Thailand. Written by specialists at Tilleke & Gibbins in Bangkok, it is the only comprehensive English-language guide to the Thai legal system with a focus on the concerns of foreign business and investment.
Read More
November 27, 2024
In Thailand, a business rehabilitation plan in court-supervised rehabilitation proceedings is a crucial element of the business rehabilitation process that outlines how a debtor’s assets will be managed. It also provides guidance for resolving a debtor’s business challenges so that the business can survive and continue to generate returns, increasing the likelihood that its creditors will be repaid. Key Plan Components The Bankruptcy Act B.E. 2483 sets forth the following components to be covered in a rehabilitation plan: The reasons for rehabilitation; Details about the debtor’s assets, liabilities, and other binding obligations at the time the court-ordered rehabilitation; Principles and methods of the rehabilitation; Redemption of collateral when there are secured creditors and guarantor liabilities; Ways to resolve problems arising from a temporary lack of liquidity during plan implementation; Action to be taken when a claim or debt is assigned; Name, qualifications, and letter of consent of the plan administrator, as well as information on compensation; Appointment and release of the plan administrator; Period in which the plan will be implemented (maximum of five years); and Refusal of the debtor’s assets or refusal of contractual rights if the debtor’s assets or contractual rights have obligations that exceed the benefits they yield. Considering the diverse nature and challenges of each debtor’s business, the details listed here are only general guidelines for what should be included in a rehabilitation plan. The planner has the flexibility to create a plan with different details or guidelines than those outlined above to best suit the nature and challenges of the debtor’s business. The planner can also omit some of the mentioned requirements if they are not relevant to the debtor’s business. Concerns of Relevance Court approval of the rehabilitation plan. Once the plan is approved by a meeting of the creditors, it is necessary
Read More
November 25, 2024
Trademark registration for marks composed of combinations of Roman letters and/or Arabic numerals has long been challenging in Thailand, particularly for those that are neither stylised nor pronounceable. There have been conflicting perspectives regarding the interpretation of “invented letter(s) and numeral(s)” under Section 7 of the Thai Trademark Act. The Department of Intellectual Property (DIP) has considered that letters and numerals must feature notable visual enhancements to be inherently distinctive, and “invented” must be in the form of stylisation, such as overlapping or interlocking letters, or intricate designs like traditional Thai oral patterns or geometric motifs. Some examples of acceptable letter and numeral marks according to the DIP The courts, however, have consistently recognised that three-letter marks, even when presented without stylisation, can be inherently distinctive. The rationale is that these marks, viewed as random and unusual combinations, can in many cases be distinguishable from common words and sufficient for the public to identify the associated goods/services, and distinguish them from others. Following Supreme Court precedents on registrability, the DIP officially updated its Examination Guidelines in January 2022 to recognise that combinations of three or more letters, even if not stylised or forming pronounceable words, can be deemed inherently distinctive. Challenges persist, however, for two-letter marks, which still face significant obstacles in achieving registrability. The JD case Background Beijing Jing Dong 360 Du E-Commerce, one of China’s largest e-commerce companies, led trademark applications for the marks JD.COM (and device) and JD.CO.TH (and device) for services in Class 35 related to advertising and business management: The registrar rejected the applications, citing insufficient stylisation of ‘JD’ and describing ‘.com’ and ‘.co.th’ as common descriptive terms. The applicant appealed to the Board of Trademarks, which upheld the refusal, echoing the registrar’s reasoning and asserting that the marks were devoid of inherent distinctiveness
Read More
November 15, 2024
Vietnam’s new Decree No. 147/2024/ND-CP on the management, provision, and use of internet services and online information (“Decree 147”), which will come into effect on December 25, 2024, replacing Decree No. 72/2013/ND-CP (“Decree 72”), introduces several changes to the regime for domain name dispute resolution. The new decree aims to clarify the legal framework and address some longstanding inconsistencies between Vietnam’s laws on intellectual property and information technology. The main changes related to domain name dispute resolution under Decree 147 are summarized below. Removal of Prescriptive Actions Decree 147 no longer lists specific actions for resolving domain name disputes. Decree 72 had outlined three methods: negotiation/mediation, arbitration, and court. However, IP practitioners had long criticized this approach, arguing it conflicted with the IP Law, which additionally allows administrative action. By omitting these methods, the new decree implies an acceptance of administrative action as provided in the IP Law. However, Decree 147 remains silent on establishing a dispute resolution forum aligned with the CPTPP’s requirement for a UDRP-like model. Currently, Vietnam’s available forums do not fully conform to the UDRP framework. An anticipated circular may provide further guidance on this aspect. Deactivation of Domain Names Decree 72 does not have any provision on the deactivation of a domain name. However, Decree 147 has stipulated some situations where domain names will be deactivated, such as when there is a request from an authority, or when it is discovered that incorrect information was used for registration. Clearer Criteria for Dispute Resolution Article 16 of Decree 147 sets out three clear criteria that must be met for domain name dispute resolution to proceed: (i) confusing similarity with the plaintiff’s trademark, trade name, or personal name; (ii) the defendant’s lack of legitimate rights or interests in the domain name; and (iii) bad faith. Previously,
Read More