Does New Chinese Franchise Law Have Feng Shui?

Earlier this month, May 1st to be exact, the long awaited Chinese Franchise Disclosure Guidelines ("Guidelines") went into effect. The Guidelines have brought some clarity to the Regulations as they attempt to add specific details to specific enforcement issues, but there are still traps for the unwary, it appears for foreign franchisors.

Specifically, Article 4 of the Guidelines requires a franchisor to deliver a written disclosure document to a prospective franchisee at least 30 days before the execution of the franchise contract. Nothing is said about the all important "first meeting"; rather, it is the number of days that seems to have the most relevance vis a vis the time of delivery.

Additionally, the new Guidelines are silent as to whether we are talking about business or calendar days. Remember, Mandarin Chinese working days and calendar days are depicted differently. Calendar days are typically shortened to "days", whereas working days cannot be shortened, according to my Chinese colleagues.

I will post more on the potential pitfalls of the most recently enacted Guidelines in the next few days, but for now it appears that we are getting more Qi than water.