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Franchising as a business concept is also rapidly developing in India. At present the concept is present in the hotel, fast food chains both international and domestic/regional brands and various retail outlets & computer education. Therefore, in appropriate cases, it would also be an attractive option for a foreign company to establish business in India through the franchising route. India does not have any franchise specific legislation therefore the relationship and arrangement in a franchise network would be governed by different branches of law for which specific legislations are enacted in India such as |
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general law of contract |
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intellectual and industrial property law |
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monopolies and restrictive trade practices or competition laws, |
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taxation, |
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labour law, |
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legislation regulating foreign exchange and foreign investments and |
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consumer protection. |
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Other legislations may merit consideration depending upon the nature of franchising business and involvement of different parties. Payments under franchise would be subject to the provisions of FEMA, in as much as, remittance of foreign exchange for use and/or purchase of trademark or franchise in India would require prior approval of RBI. |
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