Franchise Agreements In Uzbekistan: A Brief Overview

This legal highlight overviews the rules and regulations applicable to franchise agreements. Until very recently, such type of agreements has not been particularly widespread in Uzbekistan and the relevant legislation, being patchy and unelaborate, has been operating in vacuum. Recent liberalization tendencies have paved the way for foreign entities to increase their effective presence within the country and made franchise agreements more appealing.

Being one of the few Uzbek law firms that have experience of arrangement and registration of franchise transactions, we bring together and review some of the main rules for franchising. A question - answer form of the review is offered to streamline the description.

1. What is franchising and what specific laws and regulations apply?

   Uzbek law defines franchising (or, as it is also called complex entrepreneurial licensing) as an arrangement, where one party (a franchisor) agrees to transfer to another party ( a franchisee) a complex of exclusive (licensed) rights, including the rights to use the company name of the franchisor, his protected commercial information and other objects of exclusive rights (trademarks, service marks, inventions, etc.) in entrepreneurial activities of the franchisee, in consideration of payment.

   Chapter 50 of the Uzbek Civil Code of August 29, 1996, provides for the primary legal framework. Other sources of relevant rules include:

   Law on Trademarks, Service Marks and Places of Origin of August 30, 2001; Law on Commercial Secrets of September 11, 2014; Law on Corporate Names of September 18, 2006 Law on Competition of January 6, 2012; Law on Advertisement of December 25, 1998. Decree of the Cabinet of Ministers on the Regulations on the State Registration of Franchise Agreements No. 244 of November 4, 2010; Regulations on Preparation, Submission and Approval of Applications for the Registration of Trademarks and Service Marks No. 1988 of July 29, 2009; Regulations on the Registration of Agreements on Transfer (Licensing) of Intellectual Property Rights No. 1481 of June 17, 2005 2. Do these laws apply to foreign franchisors?

   The above laws and the rules explained below apply to both local and foreign franchisors without a substantial distinction. There are no requirements to register as a foreign franchisor.

3. What are the rules for formalization (execution and perfection) of franchise agreements?

   The agreement has to be made in writing. It must then be registered with...