(The development of commercial franchise law in China : legal transplant and innovation)

With implementation of the Franchise Measures by the then Ministry of Internal Trade in 1997, China become one of the few countries with a franchise specific regulation. Although China has adopted the franchise concept from America successfully, it did not take America’s franchise law. In terms of commercial environment, Chinese market in 1990s was similar to US when its first franchise law was implemented. However, the commercial law environment and the understanding of franchise concept by general public were at a very different level. China’s 1997 Franchise Measures was criticized for being vague and unprofessional, however, it has facilitated the development of franchise in China. From the 2005 Franchise Measure by the Ministry of Commerce to the 2007 Franchise Regulation by the State Council, Chinese franchise law has developed through borrowing from experiences of international community and innovation. Based on traditional legal research methods combined with comparative methodology, historical methodology and critical theory, this paper analyses the adoption of legal transplant and innovation by Chinese authorities in developing franchise law in China. It also examines the strength and weakness of the franchise law in China in line with the development of franchise sector and commercial environment in China generally