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Franchise Highlight

Code of ethics

Article 3(3) of the Constitution, which relates to the practice of business ethics professionally among members of the Association, denotes that members of the Association shall be subjected to the codes as follows:

(a) Members shall not be allowed to sell, offer to sell, distribute any products, or offer services, or get involve in sales promotion or distribution under any term or representation which tend to confuse or deceive purchasers or potential purchasers that what is being offered is a franchise.

(b) Members shall not be allowed to duplicate the trademark, name of business, corporate identity, slogan or any label or identification belonging to other franchisors in any way or manner that tends to confuse or deceive the purchasers and potential purchasers.

(c) Every franchisor shall have the responsibility of supplying a business format that is complete and proven to be successful, if the franchisee complies with the terms and conditions provided in the business format.

(d) Every franchisee shall have the responsibility of protecting all of the contents of the business format and trade secrets belonging to the franchisor.

(e) All information deemed important for the franchise relationship shall be revealed precisely and completely in writing to the would-be-franchisee before the parties enter into any agreement.

(f) Every franchise agreement shall clearly state the responsibilities and obligations of the relevant parties and all other related terms and shall be free from any doubt or confusion.

(g) Every franchise agreement and all matters important and basic to its structure and formed relationship shall be in writing and copies made thereof shall be given to the franchisee.

(h) Every franchisor shall choose and only accept franchisees who have had their background investigated, have basic skills, education, personal qualities and sufficient capital to be successful. Any discrimination based on race, skin colour, religion, nationality or sex shall not be allowed.

(i) Every franchisor shall supervise the franchisee’s business to ensure that the contractual obligations of both parties are complied with, and the interests of the public are being protected.

(j) The act of fairness shall be prioritised in all transactions between franchisor and franchisee, and each franchisor shall give notice to franchisees on any breach of contract and shall give sufficient time to indemnify the breach.

(k) Every franchisor shall strive with much effort to settle any complaint, dissatisfaction or objection and conflict with franchisees sincerely, through communication as well as fair and reasonable negotiation.

(l) Every franchisee shall bear the responsibility to make certain payments or royalty or fulfilling specific purchases from the franchisor as stipulated in the franchise agreement, and in return the franchisor shall bear the responsibility of giving full management support to franchisees.

(m) All members shall bear the responsibility of protecting the interest of consumers and the nation, and shall share the responsibility of upholding the high reputation of the franchise industry.

(n) The support institutions shall bear the responsibility of giving effective supports in facilitating the business practice of each franchisor and its franchisees; providing advisory services and current references; giving fair, friendly and reliable guidance; helping the franchisor and franchisee as a whole in order for all franchise ‘family’ members to be more successful, independent, competitive and sustainable; and shall bear the responsibility to be an understanding business partner and to implement the win-win concept.

(o) Every member shall bear the responsibility of helping one another and not to compete in a negative manner.

(p) Every member shall bear the responsibility of obeying all national laws and regulations.