Legal Assistance on Franchise Agreements in Singapore

The Singapore franchise industry must follow the regulations imposed by the Franchising and Licensing Association (FLA) as there is no law concentrating on this sector. The FLA has drafted a Code of Ethics which applies to both franchisers and franchisees. Local or foreign companies looking to set up a franchise in Singapore can do that in accordance with the Business Registration Act which provides for the establishment of partnerships and sole proprietorships, or under the Companies Act which provides for the establishment of other types of companies. The most important aspect of franchises in Singapore is the franchise agreement which must comply with several laws, among which the Competition Act and the Intellectual Property Law.

Our lawyers in Singapore can help foreign investors with the set up procedure of a franchise in accordance with the FLA’s requirements.

Drafting the franchise agreement in Singapore

All information about the franchise must be put together in one or more written agreements which will provide in a clear manner the terms of the contract and the right and obligations of the parties involved in the franchise. If one of the parties is an FLA member, they have no right to promote a franchise in a misleading way. All information about the franchise must be based on accurate data. 7 days prior to signing the franchise agreement, the franchisor must disclose to the franchisee updated information about its operations, investments need and other records on the performance of the business. Information about the franchisor’s operations must also be stated in the franchise agreement.

Assistance in preparing a franchise agreement in Singapore

Our law firm in Singapore can assist companies looking to conclude a franchise agreement by providing them with the following:

• -          verifying the agreement for any misleading clauses which contravene the Competition Act;
• -          verifying the similarities between the parties’ trademarks;
• -          verifying the franchise’s terms of transferability.

Our Singapore lawyers can also assist franchisers and franchisees with legal advice on the standards of conduct to be followed and the termination with good cause of the agreement.

Do not hesitate to contact out local law firm if you are interested in setting up a franchise in Singapore.