Structuring a Franchise in the PRC

This article is intended to provide a general guide to the subject matter. Specific advice should be sought about individual circumstances. Further information or advice may be obtained from Linklaters & Paines, Hong Kong office, 14th Floor, Alexandra House, Chater Road, Hong Kong; telephone: (852) 2842 4888; fax: (852) 2810 8133; contact David Mullarkey or Jeremy Parr.

The following article examines the manner in which a franchise operation may be structured in the PRC.

The manner in which a franchise is structured largely is dictated by various factors such as the degree of control which the franchisor wishes to exercise over the franchisee, the capability of the franchisee, the available resources and the degree of market penetration which the franchisor or franchisee may have in the PRC market. The following are just a few ways in which a franchise arrangement may be structured:-