MOC Issues New Rule for Trade Secret Protection in Commercial Franchise

Recently, the Ministry of Commerce released the revised “Measures for information disclosure of commercial franchising” (the “Measures”) which will come into effect from 1st April. Compared with the past regulation, the most attractive part is the confidentiality responsibility of the franchisee, and the new regulation consists two main parts as follows(the image today is the logo of McDonald’s and Subway, the major franchisors in China):

1, The franchisee shall not disclose or improper use any trade secret accessed to him/her when negotiating on the agreement, no matter whether the agreement is concluded or not;