Qualification. The franchisor must have a mature business model and the capacity to give franchisees continuing operational guidance, technical support and training. It must also have at least two directly operated outlets that have been trading for more than a year — the "two stores, one year" rule.
Recordal. The franchisor must record the arrangement with the commerce authority within 15 days of signing its first franchise agreement, and must update the recordal whenever the recorded information changes.
Disclosure. At least 30 days before the agreement is signed, the franchisor must give the franchisee, in writing, the categories of information prescribed by the regulations, together with the text of the contract. The agreement must also give the franchisee a unilateral right to terminate within a set period — in effect a cooling-off period.
Failing to record, disclosing inaccurately, or falling short of the "two stores, one year" threshold can each attract administrative liability, and each gives the franchisee a basis to terminate or to claim damages.
