Franchising in Hong Kong Hong Kong General Chamber of Commerce
Code of Ethics

中文版
GENERAL PROVISIONS
  1. Members of HKFA shall abide by all applicable laws and regulations.

  2. Members shall conduct their business in a professional manner and never blemish the reputation of HKFA.

  3. No member shall offer, sell or promote the sale of any franchise by means of any explicit or implied representation which may deceive or mislead prospective purchasers.

  4. No member shall imitate the trade mark, trade name, corporate name, advertising slogan or other mark of identification of another in any manner or form that may mislead or deceive or cause confusion.

  5. The franchise agreement shall be in writing and shall clearly set forth the terms of the relationship and the respective rights and obligations of each party.

  6. Members acknowledge that all information provided by the parties during the negotiation of a franchise agreement is strictly confidential and shall not be utilized or disclosed to any other party unless prior written agreement has been reached by both parties.

  7. Co-operation and fairness shall characterise all dealings between Franchisors, Franchisees and/or Franchise Consultants. The parties shall not discriminate on the basis of race, colour, religion, national origin, age, disability or sex, when considering a franchise applicant.

  8. Franchisor and Franchisee shall use all endeavours to maintain and preserve the franchise business and shall readily, whether jointly or severally, take all necessary action to protect the franchise and its property.

  9. Franchisor and Franchisee shall make every effort to resolve disputes with good faith and goodwill through fair and reasonable direct communication and negotiation. Failing this, due consideration should be then given to the process of arbitration.

  10. Franchisor and Franchisee shall demonstrate adequate financial strength to support the development of the franchise.

PROVISIONS RELATING TO FRANCHISOR

  1. Full and accurate written disclosure of all information considered material to the franchise relationship (including but not limited to, Franchisor's current operations, the investment required, potential profits and performance records) shall be given to each prospective franchisee within a reasonable time prior to the execution of any binding document.

  2. Franchisor shall strongly advise a prospective franchisee to seek independent professional legal advice before accepting any commitment.

  3. To the extent possible, Franchisor shall encourage a prospective franchisee to contact existing Franchisees to gain a better understanding of the franchise business.

  4. Franchisor shall only select and accept a franchisee who upon reasonable investigation appear to possess the basic skills, education, personal qualities and financial resources adequate to perform and fulfil the needs and requirements of the franchise.

  5. Franchisor shall provide reasonable guidance to the Franchisee for the purpose of maintaining the integrity of the entire franchise system.

  6. Franchisor shall maintain consistent quality in the goods / services provided under the franchise and ensure a constant supply of quality materials, products and services.

  7. Franchisor shall be accessible and responsive to communications from Franchisee for the purpose of mutual understanding.

  8. To the extent reasonably appropriate under the circumstances and with good faith, Franchisor shall give notice to Franchisee of any contractual breach and grant reasonable time to remedy default.

PROVISIONS RELATING TO FRANCHISEE

  1. Franchisee shall provide full and frank disclosure of all information considered material to facilitate Franchisor's selection of an appropriate franchisee for the franchise business.

  2. Franchisee shall use its best endeavours in terms of competency and integrity in its conduct and promotion of the franchise business.

  3. Franchisee shall conduct the franchise business in compliance with all applicable laws and shall maintain accurate records that may be reviewed by the Franchisor at the Franchisor's discretion.

  4. Franchisee shall respect the confidentiality of all information in relation to a franchise and shall not, whether during or after termination of the franchise relationship, disclose or permit disclosure of any such information without Franchisor's written consent.

  5. Franchisee shall undertake and complete all necessary training to ensure the franchise business is managed in a manner commensurate with the balance of the franchise system.

CODE OF ETHICS FOR FRANCHISE CONSULTANTS

  1. To always act in good faith and put the interests of his client above his own interest but in the event that there is an actual or potential conflict of interest, he must cease to act.

  2. To act in utmost honesty and fairness and observe the highest standards of competence and integrity and in the event that the assignment or any request from the client involves a breach of this Code of Ethics, he must immediately cease to act for that client.

  3. To accept only those assignments for which he is competent to undertake and advise, and to make every effort to deliver assignments expeditiously according to contract.

  4. To make full and frank disclosure to his clients or prospective clients any personal or financial interests or other material circumstances which may in any way influence his work for that client or the client's decision, including but not limited to the following:
    1. any directorship or direct/indirect personal or commercial interest in:
        - any business which competes with the client
        - any business or goods/services recommended to the client
        - any business which is linked to or supports or co-operates with the business recommended to the client

    1. any personal relationship with any individual in the employment of the client or the business recommended to the client

    2. any actual or potential conflict of interest

and to promptly inform the client of any change in or the coming into existence of any such circumstances referred to above.

  1. To endeavour to collect and provide the client with all information, irrespective of whether such information is good or bad, as regards the business of the client or the recommended business which are material to the client's decision.

  2. To adopt an independent and objective attitude towards his clients so as to ensure that the advice given is impartial, fair and professional. He should never attempt to interfere with the final judgement of his client.

  3. To acknowledge and respect the confidentiality of all information received in the course of his job concerning the business or financial information of the client and not to disclose or permit disclosure of any such information without the client's prior written consent.

  4. To never utilise or disclose information acquired during a previous assignment when performing or advising another client.

  5. To provide clients with a written proposal of the terms of reference, including a quotation of fees for each stage of the consulting and/or other ancillary services rendered and the schedule of payment of such fees.

  6. To encourage all clients to abide by the Code of Ethics of the Hong Kong Franchise Association regardless of whether or not that client is a member of the Association.

  7. To abide by the decision of the Hong Kong Franchise Association in the interpretation of its Code of Ethics.

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Hong Kong Franchise Association
c/o Hong Kong General Chamber of Commerce
香港特許經營權協會
香港總商會(附屬機構)
22/F United Centre, 95 Queensway, Hong Kong
Tel : (852) 2529-9229       Fax : (852) 2527-9843
Email : hkfa@franchise.org.hk     Web Site :http://www.franchise.org.hk