In a franchising partnership, the owner or franchisor grants the use of its products, services, and know-how to another party, the franchisee, who will become an affiliate.
Franchising is a business concept that can be mutually advantageous both for the party selling the concept and for the party acquiring it. In order to start a franchising business in Hong Kong, both parties will need to comply with a few requirements.
Our lawyers in Hong Kong highlight the main legal aspects to consider when entering into a franchise agreement.
We invite you to watch the following video about the advantages of starting a franchise in Hong Kong:
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Franchising in Hong Kong
Franchising, as a business model, is widely used in several well-developed business sectors in Hong Kong. These include the foods and beverages sector, the retail sector and the services industry.
Simple examples include international restaurants in Hong Kong, fashion or convenience stores, travel companies, or businesses involved in education and training. In Hong Kong, a difference also exists between international brands and Chinese Mainland brands.
Franchising can be a successful way of growing a business and entering a specific business sector without necessarily having to consider the same business risks and costs associated with starting a new company. When they use an already established international brand, investors may enjoy a higher market assimilation rate.
Our Hong Kong lawyers can give you complete information about the laws governing foreign investments in Hong Kong if you are a foreign entrepreneur looking to know more about the business and regulatory regime.
Steps for franchising in Hong Kong
The franchise model is based on an agreement and a model of operation. The parties each observe their own legal requirements, with the franchisee complying with several operational criteria, as requested by the franchisor in the agreement. The franchisee will also have to pay an initial fee and then a percentage of the business profits.
Our attorneys in Hong Kong can give you details about the Contract Law and any particular legal aspects that may be of importance when signing a certain agreement for franchising.
Contact our law firm in Hong Kong for complete information about the legal services we provide and how we can be of assistance to any investor interested in opening a franchise in the city.