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Franchising is a thriving sector of the Nepalese economy, and Bhaktapur is no exception with many international and native brands. Nepal does not have a specific law concerning franchising yet, but a legal framework governing business transactions is in place, which includes the Nepal Contract Act, the National Code, the Competition Promotion and Market Protection Act. These regulations also cover franchising fundamentals and dictate the standards for contractual agreements between the franchisee and the franchisor.
Despite the absence of explicit franchising law, the contractual process, intellectual property rights, and dispute resolution might require in-depth legal understanding. Lawyers can also provide key assistance in other facets such as navigating through commercial leases, interpreting franchise agreements, and ensuring you comply with all relevant regulations. Should a dispute arise, having invested in legal guidance early on may save you from potentially significant financial distress and reputational damage.
The Nepal Contract Act is of notable importance as it outlines the responsibilities of both parties and breach of contract implications. New business franchises should also be aware of the Foreign Investment and Technology Transfer Act (FITTA) as it governs the rights of foreign franchises operating within the country. Intellectual property laws are also important for franchising, and, even though they are relatively new in Nepal, they are strict and enforceable.
While Nepal does not have any specific pre-sale disclosure laws related to franchises, the general contract law requires all parties to provide honest and full disclosure.
According to the Contract Act of Nepal, a franchise agreement can be terminated if there's a breach of the conditions stated in the contract.
Most franchise contracts in Nepal have arbitral clauses requiring parties to resort to arbitration in case of disputes.
Though the Nepali language is preferred, it is not mandatory. English is widely acceptable in legal and business communications.
Yes, under the Foreign Investment and Technology Transfer Act (FITTA), a foreign franchisor can own a franchise in Nepal, provided they comply with certain regulations and procedural necessities.
For supplemental information, consult the Department of Industry, and the Investment Board Nepal for rules and regulations concerning foreign investment. The Patent, Design and Trademark office may provide assistance in maintaining brand and design rights.
Research and understand the basics of franchising and Nepalese laws regarding franchises. Before signing any franchise agreements, seek advice from a lawyer specialized in business and franchise law. The Nepal Bar Association, or private law firms can help in identifying lawyers in this sector. Continued regulatory compliance and dispute resolution also necessitate periodic legal consultation.
