LEHMAN, LEE & XU ATTENDS SPECIAL SESSION OF CHINA FRANCHISE EXPO

Beijing, China – April 2007 Lehman, Lee & Xu attended a special session of the China Franchise Expo entitled Legal Affairs Regarding Franchise. The long-anticipated meeting discussed the Regulation on the Administration of Commercial Franchise Operation, protecting your IP rights, and the draft Labour Contract Law and its potential effects on franchising. However, of most interest was the expected clarification to be made by the Ministry of Commerce on certain unsettled issues in the new Regulations issued on January 31, 2007 by the State Council.

International franchisers are increasingly becoming interested in the Chinese market, with the issuance of the new Regulations providing investors with a more structured framework in which franchises operate. Though somewhat reserved in his statements, Wang Xiaochuan of the Ministry of Commerce made several points, including: 1) “the two stores plus one year” rule applies to international franchise agreements, and 2) two clarification rules will be issued by May 1 of this year. Although this provides somewhat more guidance on the subject matter, there are still many issues which remain to be 'flushed out' through further implementing regulations.

To learn more about the firm’s work in franchising, please visit www.lehmanlaw.com.

LEHMAN, LEE & XU is a prominent Chinese corporate law firm and trademark and patent agency. The firm has offices in Beijing, Shanghai, Shenzhen, Hong Kong, Macau, and Mongolia, and is managed by Mr. Edward Lehman, who has two decades of legal experience in China.