The Ministry of Commerce confirmed on its website on January 11 that it has set the same rules for foreign funded franchising operation as for domestic businesses in terms of incorporation, rights and obligations, information disclosure, and advertising, etc. , except that they are supposed to follow different procedures.

The regulations for franchising business will be effective as of February 1, 2005.

As a new circulation model in China, franchising has experienced fast development in China in recent years and promises great potential. The article on the website recognized the positive role of this business model in improving the corporate structure, absorbing private capital, promoting the growth of small and medium sized enterprises and offering more job opportunities.

By the end of 2003, in China there had been 1900 franchising systems. The nearly 82,000 stores set up under franchising contracts had created about 2 million jobs and extended to more than 50 sectors.

The rules are designed to address problems in the business, especially frauds.