Abstract: In franchising, parties in a franchise agreement utilize agreements regarding pricing, product quality, and business location as tools in order to maintain mutual control, thereby ensuring the operational viability of the franchisee and the consistency of the entire franchise system. However, these arrangements may constitute anti-competitive agreements prohibited under the current Law on Competition in Vietnam. This article discusses agreements currently considered anti-competitive agreements in franchise agreements, with references to similar provisions in the European Union and the United States, specifically precedents from these jurisdictions and EU Regulation 720/2022, which took effect on May 10, 2022. Based on this comparative analysis, the article provides comments and recommendations for improving the legal frameworks in Vietnam.
Keywords: Law on Commerce, Law on Competition, Franchise, Anti-competitive agreement.
I. Introduction
Currently, franchising is one of the common commercial activities that brings significant value to a country’s economy.[1] In the course of business operations, the franchisor has the right to control the franchisee’s franchise outlet in order to ensure that the franchisees’ provision of products, goods, or services is uniform in quality, quantity, and price.[2] This is aimed at avoiding situations in which consumers perceive differences when using products or services at different franchise outlets. From the consumer’s perspective, these franchise outlets are homogeneous and share a common ownership structure with multiple branches; therefore, the poor quality of goods or services provided by one branch may negatively affect the reputation of the entire franchise system.
Conversely, from the franchisor’s perspective, franchise outlets exist independently in terms of finance and legal status.[3] Within a franchise system characterized by uniformity in price, quality, and the goods supplied, consumers may choose any franchise outlet among them. A geographical area in which numerous outlets of the same franchise system are densely concentrated may lead to the customer base in that area being divided, reducing the inherent revenue and creating internal competition among franchisees within the same system. This has given rise to agreements on business locations or the division of business territories among franchise outlets in order to limit such situations.
Thus, the very nature of uniformity and internal competition has led to the formation of the aforementioned specific agreements in franchising relationships. However, these agreements may constitute agreements restricting competition that are prohibited under the current Competition Law. Essentially, franchising activities remain subject to competition law in the same way as other commercial activities. However, subjecting franchising relationships to the general provisions of the current Competition Law, as applied to other commercial activities, may result in inadequacies. This is because such an approach would alter the inherent features of franchising activities and undermine the legitimate rights and interests of traders participating in franchise relationships. Consequently, this would reduce the investment incentives of domestic and foreign traders, hinder the future development of franchising, and directly affect Vietnam’s economy.
This article presents and analyzes the provisions of Vietnamese law on agreements restricting competition in franchising activities, while drawing connections to similar regulations under the laws of the European Union and the United States—jurisdictions that have repeatedly amended their legal frameworks to keep pace with the development of this activity. Based on this comparative perspective, the article offers suggestions for feasible and appropriate approaches to this issue in Vietnam.
II. Anti-competitive Agreements in Franchise Activities in Vietnam
Current competition law classifies anti-competitive agreements into two groups: agreements between enterprises operating in the same relevant market (horizontal agreements) and agreements between enterprises within the same chain of production, distribution, and supply (vertical agreements). Accordingly, a franchise contract may give rise to both groups of agreements. First, agreements between enterprises in the same relevant market arise where the franchisor also conducts business activities similar to those of the franchisee. For example, if A operates a coffee shop and grants a franchise to B to open another similar coffee shop, the agreement between A and B is considered an agreement between enterprises in the same relevant market. Second, agreements between enterprises within the same production, distribution, and supply chain arise where the franchisor does not participate directly in such business activities. For instance, if A grants a franchise to B to operate a coffee shop, but A does not directly open and only manages business establishments, then the agreement between A and B is considered an agreement between enterprises within the same production, distribution, and supply chain. Based on the above-mentioned characteristics of uniformity and internal competition, several types of agreements commonly found in a franchise contract but constituting anti-competitive agreements include:
2.1. Price Agreements
Price agreements on the distribution and supply of goods and services are commonly applied by the parties to determine a specific price for the goods or services to be traded under the franchise arrangement.[4] Such agreements may be reflected through the parties’ agreement on a fixed price, a minimum price, a maximum price, or a common method of price calculation for the goods or services. This may cause the agreement to be regarded as an “agreement to fix prices of goods or services directly or indirectly” and be prohibited if it falls under Clause 1 Article 12 for agreements between enterprises operating in the same relevant market, or Clause 4 Article 12 of the Law on Competition 2018 for agreements between enterprises within the same production, distribution, and supply chain that cause or are capable of causing a significant anti-competitive effect in the market when each enterprise participating in the agreement has a market share of 15% or more under Point b Clause 3 Article 11 of Government Decree No. 35/2020 (GD). In essence, price-fixing agreements are prohibited because such conduct causes the prices of goods and services to no longer be determined by the natural laws of the market but instead be created by the participating parties. Prices in these circumstances are typically abnormally high compared to prices formed under market rules, resulting in negative effects on consumers. Within franchise relationships, however, price-fixing plays a role in ensuring the necessary uniformity of the system. The prohibition of such agreements under the current general regulations may hinder the development of franchise activities. Nevertheless, it cannot be denied that price agreements—even in the context of commercial franchising—still affect market competition and the supply-and-demand mechanism. In certain specific sectors, large-scale franchise systems may even have the capacity to influence the prices of goods and services. Therefore, price agreements in such activities still require legal regulation, though under a more appropriate regulatory framework.
In addition, price agreements in franchise contracts may be regarded as “agreements to prevent, restrict, or impede other enterprises from entering the market or expanding business” under Clause 5 or “agreements to exclude from the market enterprises that are not parties to the agreement” under Clause 6 Article 11 of the Law on Competition 2018. These agreements are per se prohibited under Clause 2 Article 12 of this Law. This is because the price levels in such cases create a sufficiently large “entry barrier” that prevents enterprises not participating in the agreement from entering the market,[5] from expanding their business scale,[6] or even forces them to withdraw from the relevant market.[7] Contrary to the previous case, the prices in this circumstance are abnormally low compared to prices formed under market rules. When the prices of goods and services are excessively low, consumers tend to abandon the goods and services of other enterprises and switch to those provided by the enterprises participating in the agreement. This indirectly places pressure on other enterprises to lower their prices, even though abnormally low prices may render the supply of such goods and services unprofitable. Such conduct reduces the incentive of new enterprises to invest in these goods and services, restricts the development of enterprises operating in the same market, and may even eliminate other enterprises in the same market, thereby enabling the parties to the agreement to obtain a higher position in the market.
2.2. Agreements on Exclusive Distribution and Supply
In franchise relationships, the franchisee is only allowed to distribute or supply goods and services associated with the franchisor’s trademark and other intellectual property rights to avoid providing benefits to a third party or a competitor in the same relevant market.[8] Allowing the franchisee to exclusively supply the franchisor’s products or services prevents the franchisee from transacting with other enterprises and reduces the accessibility of these enterprises’ products, goods, or services. Therefore, agreements on exclusive distribution and supply hinder other enterprises from entering the market or expanding their business and may constitute “agreements preventing, restraining, or prohibiting other enterprises from participating in the market or developing their business,” which are automatically prohibited under the Law on Competition 2018.[9] However, as this type of agreement is clearly established to meet the requirement of uniformity to maintain the stability of the franchise system, if the franchisor allows franchisees to distribute or supply goods or services from other enterprises, the franchised outlets would show significant differences, leading to consumer comparisons and even affecting the characteristic features of the system.
2.3. Agreements Imposing or Fixing Conditions for the Purchase or Supply of Goods and Services
Franchise contracts may also include clauses imposing that the franchisee must purchase accompanying goods or services, particularly in the sectors of food and beverage services and hotels.[10] Accordingly, such clauses require the purchase of other goods or services either from the franchisor or a third party designated by the franchisor. This means that the franchisee must satisfy the condition of purchasing these additional goods or services in order to operate the franchised business. Such an agreement may constitute an “agreement imposing or fixing conditions for entering into contracts for the purchase or sale of goods or supply of services for another enterprise, or agreements compelling another enterprise to accept obligations not directly related to the subject of the contract” under Clause 8 Article 11 and is prohibited if it falls under Clause 3 (agreements between enterprises in the same market causing or capable of causing a significant restriction of competition – the combined market share of the participating enterprises being less than 5% under Point a Clause 3 Article 11 of Government Decree No. 35/2020 (GD)) and Clause 4 (agreements between enterprises within the same production, distribution, and supply chain causing or capable of causing a significant restriction of competition) of Article 12 of the Law on Competition 2018.
In essence, requiring the franchisee to purchase accompanying goods or services aims to ensure uniform quality of products and services throughout the franchise system. For example, Party A agrees to franchise Party B to operate a coffee shop on the condition that Party B purchases processed cups from Party C to ensure the quality of the paper cups. This clause ensures that all franchise outlets use the same type of paper cup and avoids situations where the quality of cups purchased independently by the franchisee from other sources fails to meet the franchisor’s standards, thereby negatively affecting customer experience. However, if the agreement imposes that the franchisee must purchase goods or services that are not the subject of the franchise contract and do not serve to maintain uniformity, it should still be considered for prohibition under the regulations. Specifically, suppose Party B (the franchisee) signs a franchise contract with Party A (the franchisor) to operate a nationwide restaurant chain. Party A binds Party B to purchase kitchen tools such as pans, pots, etc., from Party C to ensure the quality of the final products. Notably, these kitchen tools could be purchased from other enterprises with equivalent quality as Party C, and they do not play a role in ensuring the uniformity of the franchise system because customers do not directly observe the food preparation process in the kitchen. Therefore, Party A’s agreement imposing conditions for purchasing these goods is considered an anti-competitive agreement and should be examined for prohibition.
2.4. Market Allocation Agreements
Market allocation agreements often exist in clauses regarding the scope of the franchise to define the geographical area or business location of the franchise.[11] From the perspective of competition law, such agreements are considered “agreements on customer allocation, allocation of consumption markets, sources of goods supply, or provision of services” and are prohibited under Clause 1 Article 12 and Clause 4 Article 12 of the Law on Competition 2018. Clearly, these agreements create restrictive competition among outlets within the same franchise system and limit the franchisee’s ability to expand their market. However, this internal competition is an issue that franchisees within the same system need to resolve. As analyzed above, with products, goods, and services being identical and lacking distinguishing features, franchise outlets would have no capacity to compete. This leads to suboptimal business operations if there are too many franchise outlets in the same geographic area. Therefore, while potentially subject to prohibition, these agreements serve to address internal competition issues within the franchise system and are an important component of a franchise contract.
Notably, restrictive agreements may still enjoy exemptions if they fall within and satisfy the conditions of Article 14 of the current Law on Competition. However, market allocation agreements in franchise contracts are difficult to justify under this provision.[12] Additionally, this regulation only allows temporary exemptions for restrictive agreements, whereas these agreements are indispensable due to the inherent nature of franchising activities. This further demonstrates an objective and necessary need for the formation of a dedicated legal framework within competition law for this type of activity
III. Restrictive Agreements in Franchise Activities under European Union and United States Law
3.1.
European Union Law: Block Exemption Framework for Restrictive Agreements in Franchising
3.1.1.
Case Law Pronuptia v Schillgalis
Case No. 161/84 Pronuptia v Schillgalis can be considered the foundation for subsequent specific regulations on restrictive agreements in franchising within the European Union. In this case, the plaintiff was the franchisor (Pronuptia de Paris) and the defendant was the franchisee (Schillgalis). The parties signed and performed a franchise agreement to operate a business selling wedding dresses and other wedding-related clothing and accessories. The dispute centered on the payment of royalties arising from the franchise agreement. The defendant argued that the contract was void for violating Article 101(1) on prohibited restrictive agreements under the Treaty on the Functioning of the European Union (TFEU), in order to avoid paying the disputed royalties. In line with the nature of franchising, the contract inherently contained certain restrictive agreements, which the Court of Justice of the European Union (CJEU) clarified as follows:
First, the restrictive agreements were not considered violations of Article 101(1) because they arose from the intrinsic nature of franchising aimed at protecting uniformity, system characteristics, intellectual property rights, and the reputation of the franchise system. These included agreements such as:
-
Agreement to exclusively distribute goods under the “Pronuptia de Paris” brand.
-
Agreement requiring the purchase of 80% of wedding dresses and accessories from the franchisor and 20% from a third party approved by the franchisor, which constitutes an obligation for the franchisee to buy goods and services from the franchisor.
-
Agreement to consult the suggested retail prices provided by the franchisor while allowing the franchisee freedom to set their own prices. This agreement resembles a resale price maintenance agreement, but in this case, the consultation was non-binding. Notably, although the suggested price is non-binding, the franchisee would find it difficult to set a lower price because the suggested price was carefully calculated by the franchisor to maximize revenue.
Second, the agreement granted the franchise within the territory of three German cities (Hamburg, Hanover, and Oldenburg), prohibiting the franchisor from establishing other outlets within these territories and restricting competition with other Pronuptia franchisees outside the designated territories. The Court held that this constituted a market allocation agreement and fell under Article 101(1), and it could not benefit from the exemption under Article 101(3) because it exceeded what was necessary to maintain franchising uniformity and restricted competition among franchisees. Specifically, the franchisor not only restricted establishing other franchise outlets in the territories but also compelled the franchisee to sell and distribute only at the designated locations, forbidding a second outlet outside the granted territory.[13] However, not all market allocation agreements are prohibited; this depends on the commercial relationship and specific circumstances.[14] In franchising, these exceptions arise from internal competition among franchisees within the system and from the distribution system implemented by the franchisor.
3.1.2.
Commission Regulation 720/2022
European Union law on restrictive agreements in franchising regards the franchise relationship between the franchisor and the franchisee as inherently a vertical agreement because the franchisor occupies a higher position than the franchisee within the same supply chain of goods and services. Accordingly, based on the Pronuptia case, Regulation 4087/88 was issued to govern vertical agreements in franchising. These provisions were subsequently detailed in Regulations 2790/99, 330/2010, and the current text, Regulation 720/2022, effective from May 10, 2022, on “Application of Article 101(3) of the Treaty on the Functioning of the European Union to Vertical Agreements and Concerted Practices.” According to the Guidelines on Vertical Restraints, Regulation 720/2022 applies to franchise agreements if the market share of each participating party does not exceed 30%, and the agreement does not fall within the absolutely prohibited restrictions under Article 4 (hard-core restrictions), meaning any agreement falling under Article 4 is prohibited regardless of market share.[15]
Among these, two types of agreements commonly found in franchise contracts may be absolutely prohibited: restrictions on the franchisee’s autonomy in setting prices for the supply or distribution of goods and services, and market allocation agreements. Regarding restrictions on pricing autonomy, this constitutes a form of resale price maintenance agreement. Article 4(a) of the Regulation strictly prohibits agreements that limit the franchisee’s ability to determine resale prices. The Regulation does not forbid the franchisor from setting a maximum price or a recommended price (similar to the Pronuptia case), but it prohibits fixed or minimum prices. This approach is appropriate because maximum prices may protect consumers, and recommended prices do not deprive the franchisee of pricing autonomy, whereas minimum or fixed prices may generate anti-competitive effects and eliminate the ability to adjust prices according to market forces. The franchisee may still find it difficult to price significantly below the maximum or recommended price because these prices are carefully calculated by the franchisor to ensure stable business operations.Regarding market allocation agreements, Regulation 720/2022 establishes a framework based on consumer access to goods and services and the distribution system. Access is divided into two types: active sales—where the seller actively approaches buyers, and passive sales—where buyers actively approach the seller. These methods can occur across all franchise systems. According to the classification under Regulation 720/2022, franchising in the European Union can be implemented through three main systems: exclusive franchising, selective franchising, and free franchising. Based on these factors, the Regulation specifies as follows:
First, market allocation agreements are prohibited under an exclusive distribution system—where the franchisor designates a territory or customer group to a franchisee and restricts all other franchisees from actively selling into the exclusive territory or group—except for the following five exceptions:[16]
Agreements limiting the franchisee’s exclusive right to conduct active sales within a designated territory or customer group. The exclusive distribution model inherently requires protection by the franchisor to ensure the franchisee’s business operations. Passive sales are prohibited under this rule as they would restrict consumer choice.
If the franchisor operates exclusive distribution in one territory and selective distribution in another, agreements limiting the franchisee’s active or passive sales from the exclusive territory into the selective territory are allowed to protect the selective distribution model.
The franchisor may limit the locations where franchise outlets may be established, except for online (e-commerce) operations.
In the case of wholesale franchisees, agreements limiting their active and passive sales to consumers are permitted to maintain separation between parties within the supply and distribution chain.
Agreements restricting the active or passive sale of components of goods or services to competitors of the franchisor to produce similar goods or services.
Second, the Regulation prohibits market allocation agreements where the franchisor operates under a selective distribution system—i.e., a distribution system in which the franchisor contracts only with franchisees that meet specific criteria and commits not to supply or distribute goods or services to unauthorized third parties within the designated territory to carry out the franchise activity. This provision also includes five exceptions as follows:
Market allocation agreements restricting the franchisee’s active sales to territories or customer groups under an exclusive distribution model.
Market allocation agreements restricting the franchisee’s active or passive sales to unauthorized third parties within the selective distribution territory.
Agreements restricting the locations where franchise outlets may be established.
Agreements restricting wholesale franchisees’ active or passive sales directly to consumers.
Agreements restricting the active or passive sale of components of goods or services to competitors of the franchisor.
Third, in cases where the franchisor operates under a free franchising model—i.e., neither exclusive nor selective distribution—market allocation agreements are also prohibited, except for the same five exceptions as above, to ensure that the distribution and supply chain of goods and services to consumers operates effectively:
Market allocation agreements restricting the franchisee’s active sales to territories or customer groups under an exclusive distribution model.
Market allocation agreements restricting the franchisee’s active or passive sales to third parties without a franchise within the territory under a selective distribution model.
Agreements restricting the locations where franchise outlets may be established.
Agreements restricting wholesale franchisees’ active or passive sales directly to consumers.
Agreements restricting the active or passive sale of components of goods or services to competitors of the franchisor.
Additionally, the Regulation prohibits agreements that impede the franchisee’s effective use of the internet, as this constitutes a restriction on the market and is detrimental to consumers. However, the franchisor may still impose certain limitations to ensure the effective operation of the franchise. Specifically, the provision allows two exceptions: restrictions on online sales that do not hinder effective internet use, and restrictions on online advertising that do not completely prohibit such activities.
3.2. United States Law: Development of the Rule of Reason and Case Law Transformations for Anticompetitive Agreements in Franchising
Franchising businesses in the United States have long struggled to incorporate anticompetitive clauses legally into franchise agreements. During the period prior to the mid-1970s, anticompetitive agreements in franchising were generally prohibited under the per se illegality principle established in Section 1 of the Sherman Act. Clearly, as analyzed above, this principle was not entirely suitable for assessing agreements within franchise contracts. Consequently, following legal challenges by franchisees in courts, since the latter half of the 1970s, U.S. courts began resolving such disputes under a new approach using the Rule of Reason. This period saw the emergence of case law establishing a foundation for applying the Rule of Reason to anticompetitive agreements in franchising, replacing the prior per se illegality principle, specifically:
First, in Continental T.V., Inc. v. GTE Sylvania, Inc. (1977), the court approached market allocation agreements under the Rule of Reason instead of applying the previous per se illegality principle as resolved in United States v. Arnold, Schwinn & Co. (1967).
Second, in State Oil Co. v. Khan (1997), the court addressed maximum resale price maintenance agreements under the Rule of Reason, replacing the prior per se violation applied in Albrecht v. Herald Co. (1968).
Third, in Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007), the court addressed minimum resale price maintenance agreements under the Rule of Reason instead of the prior per se violation applied in Dr. Miles Medical Co. v. John D. Park & Sons Co. (1911).
The essence of the Rule of Reason requires that the anticompetitive effects of an agreement be evaluated on a case-by-case basis, weighing the procompetitive benefits against the anticompetitive harms, thereby providing a comprehensive view of both the positive and negative impacts, as well as the economic efficiency generated by the agreement. The application of this principle generally relies on two factors: the relevant market and the franchisor’s market power. A party is considered to have market power and a potential anticompetitive impact if its market share exceeds 30%. Conversely, if the market share is below 30%, the agreement is less likely to generate anticompetitive effects.
Additionally, agreements that impose conditions on franchise contract execution are prohibited if they include the following elements: (1) the goods or services covered by the franchise contract and the tied goods or services are separable and distinguishable; (2) the franchisor possesses significant market power over the tied goods or services to compel the franchisee to purchase them; and (3) the agreement substantially affects the market for the tied goods or services. This issue was initially addressed in Siegel v. Chicken Delight, where the franchisor (Chicken Delight) required the franchisee (Siegel) to purchase attached products such as kitchen equipment, pans, packaging, etc. The court held that the franchisor’s transfer of the “Chicken Delight” trademark conferred sufficient market power to constitute a violation of the Sherman Act, and the agreement was therefore prohibited. However, in Illinois Tool Works Inc. v. Independent Ink, Inc. (2006), the U.S. Supreme Court rejected the notion that a franchisor’s market power could be presumed solely based on patent or intellectual property rights. The case established that the franchisee must independently prove the franchisor’s market power.
Overall, this shift in approach to anticompetitive agreements in U.S. franchising represents a positive development, promoting a healthy growth of the sector. Moreover, it prevents franchisees from exploiting the per se illegality principle to invalidate franchise agreements in cases where they have breached contractual obligations, thereby protecting the franchisor and preserving the essential functioning of the franchising system.
IV. Recommendations
In general, franchising activities still have to be regulated by competition law, but with appropriately tailored exemptions so that this commercial activity can develop according to its true nature, without causing conflicts between commercial law and competition law. Based on the above analysis, the author makes the following recommendations to develop the legal provisions on anticompetitive agreements in franchising in Vietnam, specifically:
First, Vietnamese law needs to unify the types of anticompetitive agreements permitted in franchising activities. As mentioned above, anticompetitive agreements in Vietnam may be horizontal or vertical agreements; however, the inherent nature of the relationship between franchisor and franchisee in this activity is vertical, because the franchisor is at a higher level than the franchisee within the same supply chain for certain goods or services, with the goods or services being identical and uniform from the consumer’s perspective. This is similar to the provisions of EU Regulation 720/2022, in which agreements in franchise contracts are regarded as vertical anticompetitive agreements.
Second, regarding agreements with anticompetitive features in franchise contracts, the above analyses of laws in the United States and the European Union show that the common feature of these jurisdictions is the application of a 30% market share threshold for each party participating in the transaction to assess anticompetitive effects. This indicates that 30% is an appropriate ceiling when the procompetitive effect outweighs the anticompetitive effect in franchising, higher than the threshold stipulated in Clause 4, Article 12 of Vietnam’s Competition Law and Point b, Clause 3, Article 11 of Decree No. 35/2020 of the Government , which is 15%. Accordingly, anticompetitive agreements in franchise contracts in Vietnam may enjoy exemption rights if they do not exceed this market share threshold.
In addition, competition law also needs to regulate special cases. Specifically, some agreements with anticompetitive features in franchising do not need to rely on the above 30% threshold because they aim to protect intellectual property rights and serve the operational coherence of the franchise system. Meanwhile, there are still agreements in such contracts that need stricter regulation to ensure they do not create obstruction, hinder competitors of the franchisor, or restrict consumers’ freedom of choice. Therefore, the author recommends the following special cases for such agreements:
(1) Anticompetitive agreements in franchise contracts that automatically enjoy exemption, meaning they are not dependent on the above threshold, include:
One, exclusive distribution agreements, which are exempt to ensure the operational coherence of franchising activities.
Two, agreements imposing conditions for the conclusion of franchise contracts, which will be exempt but must meet criteria provided by law, specifically that the tied goods or services must be closely related to the subject of the franchise contract. Referring to the U.S. approach, exemption applies if the condition does not include the following elements: (i) the tied goods or services can be separated from the subject of the franchise contract and can be replaced by similar goods or services (which shows that these tied goods or services are not indispensable and can still be substituted by other goods or services in the same market); (ii) the franchisor has significant market power over the tied goods or services to force the franchisee to purchase them; and (iii) the agreement significantly affects the market for the tied goods or services. This suggests that Vietnamese law should also provide specific explanations regarding the subject of the franchise contract in order to adopt the most appropriate approach for this provision.
(2) Agreements that require stricter regulation include:
One, minimum resale price agreements. Unlike maximum price agreements and fixed price agreements, which may enjoy exemption if they fall under the cases mentioned above, minimum resale price agreements create obstruction, hindrance, and eliminate competitors of the franchisor, negatively affecting the market; therefore, they shall be treated as per se prohibited agreements.
Two, market allocation agreements. These may enjoy exemption if the market share of each party participating in the agreement is under 30%, and if the agreement does not restrict passive sales that would limit consumer choice. Furthermore, Vietnamese law may consider providing exceptions for such agreements based on the distribution model, similar to the European Union’s approach.
V. Conclusion
In general, franchising is a special commercial activity that requires a harmonious balance between commercial law and competition law. The uniformity of the franchising system, while giving rise to internal competition among franchisees, constitutes an objective necessity for competition law to have a specific legal framework to regulate it. With regulations established since the late 20th century, the current law in the European Union and the United States on anti-competitive agreements in franchising is relatively complete and appropriate. The laws of these territories and countries can serve as a necessary and reliable reference source to improve Vietnamese law in the field of franchising, thereby ensuring the further development of this activity in Vietnam.
1. Competition Law 2018 No. 23/2018/NA14.
2.Commercial Law 2005 No. 36/2005/NA11 (amended in 2017, 2019).
3. Government Decree No. 35/2020/GD dated March 24, 2020, detailing a number of provisions of the Competition Law.
4. Government Decree No. 116/2005/GD dated September 15, 2005, detailing a number of provisions of the Competition Law.
5. Resolution 720/2022 of the European Union on the application of Article 101(3) of the Treaty on the Functioning of the European Union to vertical agreements and concerted practices.
6. Pronuptia
de Paris GmbH v. Pronuptia de Paris Irmgard Schillgallis, Case 161/84, [1986]
E.C.R 353
7. Siegel v. Chicken Delight,
Inc., 311 F. Supp. 847 (N.D. Cal. 1970)
8. Continental T.V., Inc v. GTE Sylvania., Inc (1977).
9. United
States v Arnold, Schwinn & Co. (1967).
10. State
Oil Co. v Khan (1997)
11. Albrecht
v Herald Co. (1968)
12. Leegin Creative Leather Products., v PSKS, Inc (2007)
13. Dr. Miles Medical Co. v John D. Park & Sons Co. (1911).
14.
Guidelines
on vertical restraints (2022/C 248/01)
15. Financial Journal, “State management of franchising and some recommendations,” (July 23, 2015) https://tapchitaichinh.vn/quan-ly-nha-nuoc-ve-nhuong-quyen-thuong-mai-va-mot-so-khuyen-nghi.html
16. MD Ta Kien Tuong – MD Do Thi Cam Van, “Franchising and Franchise Contracts under Vietnamese Law,” Industry and Trade Journal (November 4, 2022) https://tapchicongthuong.vn/nhuong-quyen-thuong-mai-va-hop-dong-nhuong-quyen-thuong-mai-theo-phap-luat-viet-nam-99780.htm
17. Phung Van Thanh, “Overview of Basic Legal Content on Anti-Competitive Agreements under Foreign Law” (July 22, 2019) https://www.bvntd.gov.vn/tintuc_sukien/khai-quat-nhung-noi-dung-phap-ly-co-ban-ve-thoa-thuan-han-che-canh-tranh-theo-phap-luat-nuoc-ngoai/n
18. Vu Dang Hai Yen, “Content of Franchise Contracts,” Journal of Law No. 11, 63, 64 (2008).
19. MD Nguyen Thi Hong Van, “Anti-Competitive Agreements in Franchise Contracts,” Legislative Research Journal (September 1, 2011) https://lapphap.vn/Pages/TinTuc/207633/Cac-thoa-thuan-han-che-canh-tranh-trong-hop-dong-nhuong-quyen-thuong-mai.html
20.
Nguyen Thi Tinh, Competition Law in Franchising in Vietnam at Present (Doctor of Laws Dissertation), Hanoi Law University, (2015).
21. Nguyen Anh Tho, “Disputes over Intellectual Property Rights and Anti-Competitive Agreements in Franchising,” Vietnam Journal of Legal Science No. 10(182), 37, 47 (2024).
22. Dr Tran Thang Long – Nguyen Tran Vu Tuan, “Agreements Restricting Competition in Franchising in the Food and Beverage Sector,” Legislative Research Journal (January 4, 2021) https://lapphap.vn/Pages/TinTuc/210642/Thoa-thuan-gay-han-che-canh-tranh-doi-voi-hoat-dong-nhuong-quyen-thuong-mai-trong-linh-vuc-kinh-doanh-dich-vu-an-uong.html
https://lapphap.vn/Pages/TinTuc/210642/Thoa-thuan-gay-han-che-canh-tranh-doi-voi-hoat-dong-nhuong-quyen-thuong-mai-trong-linh-vuc-kinh-doanh-dich-vu-an-uong.html
23.
Competition Law, Richard Whish & David Bailey, Oxford University Press.
24. Robert T. Joseph, Antitrust Law,
Franchising, and Vertical Restraints, Franchise Law Journal, Volume 31, Number
1, Summer 1.
25. UC Davis, What Do Franchisees Do? Vertical
Restraints as Workplace Fissuring and Labor Discipline Devices (2021) https://escholarship.org/uc/item/9x17w2kv
[*] Lecturer, Faculty of Basic Studies, University of Economics Ho Chi Minh City, Vinh Long Campus, Email: trietthm@ueh.edu.vn
[**] MD, Lecturer, Faculty of Law, University of Economics Ho Chi Minh City, Email: dungmn@ueh.edu.vn
[1] “State management of franchising and some recommendations,” Financial Journal (July 23, 2015) https://tapchitaichinh.vn/quan-ly-nha-nuoc-ve-nhuong-quyen-thuong-mai-va-mot-so-khuyen-nghi.html
[2] MD Ta Kien Tuong – ML Do Thi Cam Van, “Franchising and Franchise Contracts under Vietnamese Law,” Industry and Trade Journal (November 4, 2022) https://tapchicongthuong.vn/nhuong-quyen-thuong-mai-va-hop-dong-nhuong-quyen-thuong-mai-theo-phap-luat-viet-nam-99780.htm
[3] Vu Dang Hai Yen, “Content of Franchise Contracts,” Journal of Law No. 11, 63, 64 (2008).
[4] Nguyen Thi Tinh, Competition Law in Franchising in Vietnam at Present (Doctor of Laws Dissertation), Hanoi Law University, (2015).
[5] Government Decree No. 116/2005/GD of September 15, 2005, of the Government detailing a number of articles of the Competition Law, Point b, Clause 1, Article 19.
[6] Government Decree No. 116/2005/GD of September 15, 2005, of the Government detailing a number of articles of the Competition Law, Point b, Clause 2, Article 19.
[7] Government Decree No. 116/2005/GD of September 15, 2005, of the Government detailing a number of articles of the Competition Law, Article 20.
[8] MD Nguyen Thi Hong Van, Anti-competitive Agreements in Franchise Contracts, Legislative Studies Journal, (September 1, 2011) https://lapphap.vn/Pages/TinTuc/207633/Cac-thoa-thuan-han-che-canh-tranh-trong-hop-dong-nhuong-quyen-thuong-mai.html
[9] Competition Law 2018 No. 23/2018/QH14, Article 20.
[10] Doctor Tran Thang Long – Nguyen Tran Vu Tuan, Anti-competitive Agreements in Franchising in the Food and Beverage Service Sector, Legislative Studies Journal (January 4, 2021) https://lapphap.vn/Pages/TinTuc/210642/Thoa-thuan-gay-han-che-canh-tranh-doi-voi-hoat-dong-nhuong-quyen-thuong-mai-trong-linh-vuc-kinh-doanh-dich-vu-an-uong.html
https://lapphap.vn/Pages/TinTuc/210642/Thoa-thuan-gay-han-che-canh-tranh-doi-voi-hoat-dong-nhuong-quyen-thuong-mai-trong-linh-vuc-kinh-doanh-dich-vu-an-uong.html
[11] Nguyen Thi Tinh, ibid., 04.
[12] Nguyen Anh Tho, Disputes on Intellectual Property Rights and Anti-competitive Agreements in Franchising, Vietnam Legal Science Journal No. 10(182), 37, 47 (2024).
[13] Pronuptia
de Paris GmbH v. Pronuptia de Paris Irmgard Schillgallis, Case 161/84, [1986]
E.C.R 353
[14] COMPETITION
LAW, RICHARD WHISH & DAVID BAILEY, NHÀ XUẤT BẢN ĐẠI HỌC OXFORD, 645-646.
[15]
Guidelines on vertical restraints (2022/C 248/01)
[16] Guidelines
on vertical restraints (2022/C 248/01)
[17] UC Davis, What Do Franchisees Do?
Vertical Restraints as Workplace Fissuring and Labor Discipline Devices (2021)
https://escholarship.org/uc/item/9x17w2kv
[18] Robert
T.Joseph, Antitrust Law, Franchising, and Vertical Restraints, Franchise
Law Journal, Volume 31, Number 1, Summer (2011), file:///C:/Users/admin/Downloads/Joseph%20Robert%20T%2000%20pdf%20(3).pdf
[19] Robert T.
Joseph, tlđd, 16.
[20] Phung Van Thanh, Overview of Basic Legal Contents on Anti-competitive Agreements under Foreign Law (July 22, 2019) https://www.bvntd.gov.vn/tintuc_sukien/khai-quat-nhung-noi-dung-phap-ly-co-ban-ve-thoa-thuan-han-che-canh-tranh-theo-phap-luat-nuoc-ngoai/n
[21] Robert T.
Joseph, tlđd, 16.
[22] MD Nguyen Thi Hong Van, ibid., 8.
[23] Siegel v. Chicken Delight, Inc., 311 F. Supp. 847 (N.D.
Cal. 1970)
