Grounds for requesting the return of franchise fees
Return of franchise fees
- In any of the following circumstances, a prospective franchisee or a franchisee may request a franchiser to return the franchise fees (Article 10(1) of the 「Fair Transactions in Franchise Business Act」).
· The prospective franchisee or the franchisee requests the return of the franchise fees before the execution of the franchise agreement, or within four months after the execution date of the franchise agreement, if the franchiser fails to provide a registered information disclosure statement, or 14 days (7 days when a prospective franchisee has been given advice and suggestions by an attorney-at-law or franchise trader on an information disclosure statement) haven't passed from the date on which said information disclosure statement is provided.
· The franchiser provides the prospective franchisee with false or exaggerated information or omits important information, and the prospective franchisee requests the return of the franchise fees before executing the franchise agreement.
· The franchisee requests the return of the franchise fees within four months of the date of execution of the franchise agreement as it is found that the statement of false or exaggerated information or the omission of any important information had a material effect on the execution of the agreement.
· The franchiser unilaterally ceases the franchise business without just cause and the franchisee requests the return of the franchise fee within four months from the cessation date of the franchise business.
Method to Request the Return of Franchise Fees
Request the return of franchise fees
- Requests by a prospective franchisee or a franchisee to a franchiser to return franchise fees shall be made in writing and must include the following (Article 10 of the 「Enforcement Decree of the Fair Transactions in Franchise Business Act」).
· The name and address of the franchisee or prospective franchisee who requests the return of franchise fees
· Details of how the franchiser has provided false or exaggerated information or omitted important matters
· Details of how the franchiser's providing of false or exaggerated information or omission of important details is deemed to have had a significant impact on the conclusion of a franchise agreement
· Details of how the franchiser has unilaterally discontinued the franchise without good cause and the date of such action
· The amount of franchise fees to be returned
· Details of how the franchiser has not provided a franchise disclosure statement or how the franchiser has received a franchise fee from the prospective franchisee or has entered into a franchise agreement with the prospective franchisee under circumstances in which 14 days (where the prospective franchisee has taken advice on the franchise disclosure statement from an attorney-at-law or a fair trader, seven days) have not elapsed since the franchiser provided the franchise disclosure statement and the date of such action
Period of Return of Franchise Fees
Return of franchise fees
- A franchiser shall return the franchise fees to a franchisee or prospective franchisee within one month from the date on which the prospective franchisee or the franchisee makes a written request (Article 10(1) of the 「Fair Transactions in Franchise Business Act」).