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To regulate the gas station franchise acts and direct the public gas stations to the chained operation system of PetroChina Company Limited (hereinafter referred to: PetroChina) and China Petroleum & Chemical Corporation (hereinafter referred to: China Petroleum & Chemical Corp.) are the important measures to regulate the order of the circulation of oil products and to do well in the work of special rectification of gas stations. In order to implement the Notice of the General Office of the State Council on Carrying out the Work of Special Rectification of Gas Stations (No. 18 [2002] of the State Council), and regulate the franchise of gas stations, we hereby propose the following opinions: I. The franchise of gas stations shall refer to the operation under which the franchiser authorizes, by concluding contracts, other gas stations to use its trade name, registered trademark, know-how, operational mode, operation technology or service standards, related to gas station operation, on which he has the right to license to others. The authorized gas stations shall engage in the retail of oil products and relevant services under a unified franchise system stipulated in the contract, and shall also pay the corresponding fees to the authorizing enterprise. The enterprise that grants the right to franchise is the franchiser, and the gas stations that are granted the right to franchise are franchisees. II. In the franchise of gas stations, the principles of voluntariness, fairness, honesty and credibility shall be observed. III. The franchisers of gas stations shall be PetroChina, China Petroleum & Chemical Corp. and their authorized subsidiary companies (for the name list of the enterprises, please see the annex). The subsidiary companies shall, within the scope of authorization by their respective parent company, carry out the gas station franchise activities in all places. IV. A franchisee must meet the following conditions: (1) its gas station conforms to the local development planning on gas stations, and also conforms to the standards of the state in respect of environmental protection, fire control, and construction security; (2) it has certain capacity of operation and management, good credibility, and has no records on operation in violation of laws or rules within the latest two years; and (3) other conditions stipulated by the State Economic and Trade Commission and the economic and trade department at the provincial level. V. A franchiser shall have the following rights: (1) to supervise the franchisees' operational activities pursuant to the contract, so as to guarantee the consistency of the gas station franchise system and the uniformity of the quality of products and services; (2) to terminate, pursuant to the contract, the franchise qualification of any franchisee who violates the franchise contract by infringing upon the franchiser's lawful rights and interests and destructing the franchise system; (3) to charge from the franchisees all the fees stipulated in the contract and a certain amount of guaranty bond; and (4) other rights stipulated in the contract. VI. A franchiser must perform the following obligations: (1) to provide the operational resources and handbooks representing the franchise system; (2) to guarantee the timely distribution of oil products conforming to the quality standards of the state to the franchisees under different market conditions and with reasonable prices; (3) to provide the franchisees with business or technical guidance, trainings and other services; and (4) to use and refund the guaranty bond pursuant to the contract. VII. A franchisee shall have the following basic rights: (1) the relevant rights authorized by the franchiser stipulated in the contract; (2) to obtain the trainings and guidance offered by the franchiser; (3) to obtain the sales promotion supports conducted by the franchiser; and (4) to demand the franchiser to indemnify the losses due to its provision of false information. VIII. A franchisee must perform the following basic obligations: (1) to abide by the franchiser's operational guidelines and policies, to consciously maintain the reputation of the franchise system and the unified image of the gas stations, and not to commit any of the following acts: 1. to sell the oil products of a third party; 2. to carry out sales promotion activities without authorization; 3. to engage in other operational activities not stipulated in the contract; or 4. to transfer the right to franchise without authorization. (2) to pay the franchise royalties and other fees on time pursuant to the contract; (3) to accept the franchiser's guidance and supervision, and to guarantee the punctual submission of the authentic operational and financial documents to the franchiser;กก (4) to keep the franchiser's commercial secrets. IX. For the sake of gas station franchise, a franchise contract shall be concluded in Chinese in written form. The franchiser shall serve a sample of the contract to the franchisee at least 10 days before the official conclusion of the contract. A franchise contract shall include the following contents: (1) the contents, scope, time limit, area and exclusive privilege of the right to franchise under authorized use; (2) rights and obligations of both parties to the franchise; (3) the items and standards of charge and method of payment; (4) confidential clause; (5) insurance clause; (6) secure management clause; (7) breach liabilities; (8) modification, extension and rescission of the contract; (9) publicity and advertisements; and (10) other matters stipulated by both parties. X. The franchiser shall, 10 days before the franchise contract is officially concluded, disclose truthful, accurate and complete basic information and materials on franchise to the applicant in written form. The basic information disclosed by the franchiser shall include: (1) the franchiser's enterprise name, registered capital, domicile, business scope (duplicate of the copy of industrial and commercial registration), financial reports audited by an accounting firm; (2) the quantity, distribution places of and operational information on the franchised gas stations, the number of franchisees with whom the franchiser rescinds the franchise contracts and the reasons for the rescission of the contracts; (3) the registration of trademark, trade name and other rights to franchise, on which he has the right to license to others, the use thereof by others and the information on litigation; the information related to operation technology and service standards; (4) the amount and collection method of franchise royalties and other fees, and the conditions for refund of the guaranty bond; (5) the disputes and unsettled litigations related to the franchise; (6) the oil products available and conditions for and restrictions on service; and (7) proofs of being capable of providing the franchisees with trainings and guidance. XI. The franchisees shall, upon the franchiser's requirements, truthfully provide the documents on their own operational capacity, which mainly include the proof of the legitimate qualifications of the gas stations (in respect of planning, land, fire control, environmental protection, taxation, measurement, etc.), the "Approval Certificate for the Retail Operation of Oil Products", proof of credibility and proof of property. XII. Any applicant who has not concluded a franchise contract with the franchiser but has known the franchiser's commercial secrets through the latter's disclosure of information, shall keep secret for the franchiser, instead of disclosing or transferring any commercial secret of the franchiser or that of any franchisee who has concluded a franchise contract with the franchiser. XIII. The franchiser may charge the following franchise fees from the franchisees: (1) Accession fee: the lump-sum fee collected by the franchiser when it grants the right to franchise to the franchisee. (2) Royalty: the fee regularly paid by the franchisees to the franchiser at a certain standard or proportion when they are using the franchise. (3) Other stipulated fees: other fees collected by the franchiser from the franchisees pursuant to the contract, for the sake of providing the franchisees with relevant articles or services. The franchiser and the franchisee may, in light of the actual situation, stipulate specifically in the franchise contract the variety, amount, payment method of the franchise fees to be collected or exemption of such fees. XIV. The franchiser or the enterprise authorized by the franchiser shall, before carrying out a franchise activity, bring the relevant approval documents to the economic and trade department at the provincial level at the locality where the franchise activity is to be carried out for record, and shall accept the supervision and guidance of the local economic and trade department. Meanwhile, it needs to submit the following documents: (1) those provided for in Article 10 of the present opinions; (2) a sample of the franchise contract; (3) a handbook for operation of the franchise; (4) the recent audited financial statements; (5) the approval document on being authorized to carry out the franchise; and (6) other documents required by the economic and trade department at the provincial level to be submitted. XV. The economic and trade department at the provincial level shall strengthen the supervision and administration of gas station franchise. To the gas station that fails to obtain the "Approval Certificate for the Retail Operation of Oil Products" before September 30, 2001 but conforms to the industrial development planning on the local gas stations and thus has accessed to the franchise system of PetroChina or China Petroleum & Chemical Corp., the "Approval Certificate for the Retail Operation of Oil Products" may be issued, and in the certificate shall be marked that this gas station belongs to the franchise system of PetroChina or China Petroleum & Chemical Corp.. If the gas station withdraws from the franchise system of PetroChina or China Petroleum & Chemical Corp., the economic and trade department at the provincial level shall recall its "Approval Certificate for the Retail Operation of Oil Products". XVI. Where a franchiser has any of the following acts, it shall be investigated and punished by the economic and trade department at the provincial level. If the case is serious, its qualification to continue carrying out the gas station franchise shall be revoked. (1) it grants franchise to the gas stations not meeting the conditions for franchisees; or (2) it has other acts in violation of the state policies on the circulation of oil products. XVII. Where a franchisee has any of the following acts, the economic and trade department at the provincial level may authorize the local economic and trade department to investigate and punish such a franchisee in accordance with the law. If the case is serious, the economic and trade department at the provincial level shall recall its "Approval Certificate for the Retail Operation of Oil Products". (1) without the consent of the franchiser, carrying out franchise with the franchiser's trademark, name, identification (including any trademark, name, identification similar to or confusable with that of the franchiser); (2) after termination of the franchise contract, going on using the franchiser's trademark, name, identification (including any trademark, name, identification similar to or confusable with that of the franchiser); (3) selling a third party's oil products, unilaterally raise the oil price, promotes the sale at will or engages in service activities out of the franchise system; (4) transferring the right to franchise without the consent by the franchiser; (5) failing to meet the security standards or the conditions for secure operation; or (6) committing other acts in violation of the state policies on the circulation of oil products. Each economic and trade department at the provincial level shall timely report the relevant information on the local gas station franchise activities to the Bureau of Trade and Market of the State Economic and Trade Commission. PetroChina and China Petroleum & Chemical Corp. shall, in accordance with the present opinions, make corresponding rules and systems on the administration of gas station franchise, enforce the internal management, and further regulate the franchise acts. Annex: Name List Of The Enterprises Authorized By Petrochina And China Petroleum & Chemical Corp. To Carry Out Franchise Of Gas Stations (omitted) |
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