1. Is there a legal definition of a franchise and, if so, what is it?
There is no legal definition of a franchise under Indian law.
2. Are there any requirements that must be met prior to the offer and/or sale of a franchise? If so, please describe and include any potential consequences for failing to comply.
Registration Requirements
No, there are no pre-sale requirements for sale of a franchise business in India, and a franchisor is not required to register the offering with any Government agency before sale of a franchise.
3. Are there any registration requirements for franchisors and/or franchisees? If so, please describe them and include any potential consequences for failing to comply. Is there an obligation to update existing registrations? If so, please describe.
Disclosure Requirements
No, the franchisor is not required to make any disclosures to franchisees or a Government regulator before sale of a franchise business.
4. Are there any disclosure requirements (franchise specific or in general)? If so, please describe them (i.e. when and how must disclosure be made, is there a prescribed format, must it be in the local language, do they apply to sales to subfranchisees) and include any potential consequences for failing to comply. Is there an obligation to update and/or repeat disclosure (for example in the event that the parties enter into an amendment to the franchise agreement or on renewal)?
Other Requirements
No, please refer to the response in Question 3.
5. If the franchisee intends to use a special purpose vehicle (SPV) to operate each franchised outlet, is it sufficient to make disclosure to the SPVs’ parent company or must disclosure be made to each individual SPV franchisee?
Under Indian law, a franchisor is not required to make any disclosures to its potential franchisee, including franchisee’s SPV.
