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Zhong Lun Advises a Leading Pickled Cabbage Fish Brand and Xiaolongkan on Franchise Registration in Vietnam
Zhong Lun Advises a Leading Pickled Cabbage Fish Brand and Xiaolongkan on Franchise Registration in Vietnam
Recently, a team led by Zhong Lun partner Grace Wang assisted two prominent Chinese restaurant brands—a leading pickled cabbage fish chain and Xiaolongkan—in completing their registration as foreign franchisors with Vietnam’s Ministry of Industry and Trade (MOIT). By securing this formal franchise status, the team cleared a key regulatory hurdle, paving the way for both brands to expand into the Vietnamese market via a franchise model.
Vietnam is a high-growth consumer market in Southeast Asia, making franchising the primary route for Chinese restaurant brands expanding overseas. However, foreign franchisors must complete their registration with the MOIT in advance. Operating without this registration exposes them to administrative penalties and jeopardizes the enforceability of their franchise agreements.
Under Vietnam’s Commercial Law and related regulations, the key prerequisites for registration include: operating the franchise system for at least one year; preparing a franchise disclosure document (FDD); notarizing and authenticating proof of ownership for trademarks and business assets; and submitting a model franchise agreement that complies with mandatory Vietnamese legal provisions and satisfies local language requirements.
In practice, the challenges are substantial: the multi-step notarization and authentication process for foreign corporate documents is lengthy and prone to rejection; disclosure documents must meet Vietnamese regulatory standards while incorporating operational data from China; franchise agreements must incorporate mandatory obligations under Vietnamese law, which often conflict with commercial terms; and the regulatory review is highly discretionary, making timelines unpredictable. Many Chinese companies that bypass this mandatory pre-registration and proceed directly to contract signing later face fines, disputes, or limited legal recourse.
For this project, the team managed the entire process: assessing qualifications, handling cross-border notarization and authentication, preparing the disclosure documents, localizing the contracts, and managing regulatory communications from start to finish. By successfully balancing the brands’ commercial objectives with Vietnamese regulatory requirements, the team efficiently secured the final registrations.
A reminder for chain brands planning to expand into Vietnam: Franchise registration is a mandatory market-access requirement that cannot be deferred. It must be completed prior to franchisee recruitment and contract signing; brands should avoid a “negotiate first, comply later” approach. Cross-border franchising involves complex legal hurdles, including intellectual property protection, cross-border document authentication, and local regulatory compliance. We strongly recommend engaging a legal team with cross-border franchising experience and practical expertise in Southeast Asia as early as possible to conduct upfront compliance assessments and prevent major legal risks arising from procedural flaws.
