The dispute and analysis of the "cooling-off period" clause of the commercial franchise contract.

Compared with the franchisor, the franchisee is in a weak position in the commercial franchise, mainly in the status of inequality, information asymmetry and so on. For example, the franchisor is very familiar with the business model, business resources, industry development, etc., despite the information disclosure system, but due to the complexity of the franchise matters, the franchisee in the franchise contract before the conclusion of the information is still limited. Moreover, the franchisor also has the possibility of exaggerating or even deceiving publicity, resulting in the possibility that the franchisee cannot continue to invest in the future due to blind investment and unsatisfactory business results. Therefore, it is necessary for the legislation to provide preferential protection for the interests of the franchisee, so as to prevent it from engaging in franchising on impulse without understanding the franchise matters, and then unwilling to continue to perform the contract, giving it the time limit to think about whether to continue to perform, and the right to unilaterally terminate the contract.

Because the cooling-off period clause does not clearly stipulate the specific time of "a certain period of time", there is a big dispute about the specific time and boundary of "a certain period of time" in judicial practice when the franchise parties do not clearly agree on the period of time, or even agree on the cooling-off period clause. Some believe that the cooling-off period should have a specific time, such as the specific period after the signing or performance of the contract, some think that it is not appropriate to determine the specific time, should be the franchisee began to use the franchisee's business resources as a node, after which can no longer exercise the right of unilateral discharge.

The People's Court of Gongshu District, Hangzhou City, Zhejiang Province (2024) Zhejiang 0105 Civil Judgment No. 53 determined that: According to Article 12 of the Regulations on the Administration of Commercial Franchises, based on the principle of fairness, the exercise of the franchisee's unilateral cancellation right shall comply with The limitation of "reasonable period", combined with the industry characteristics and business practices involved in the contract, the reasonable period should not be too long. In this case, the contract term stipulated in the franchise license agreement is three years. The plaintiff requested the defendant to refund the franchise fee on June 23, 2022. The performance period of the contract has been nearly 1/3 years, and there is no other evidence in the case to prove that there is a reasonable basis for the plaintiff to propose dissolution within a reasonable period. The plaintiff's proposal to terminate the contract exceeds the reasonable period within which the franchisee can unilaterally terminate the contract after concluding the franchise contract.

The People's Court of Yueqing City, Zhejiang Province (2023) Zhejiang 0382 Minchu No. 8870 Civil Judgment determined: According to Article 12 of the Regulations on Commercial Franchise Management, if a certain behavior of the franchisee can determine that it has been carefully considered, Instead of being impulsive, it proves that it is aware of its own investment risks, and it should no longer be allowed to exercise the right of release. According to the evidence in this case, from December 2, 2022, when the plaintiff paid the defendant 40000 yuan brand cooperation fee in advance, to the signing of the contract and the delivery of the remaining brand cooperation fee, the plaintiff should understand the defendant and its operation mode, and should have the ability to independently identify whether to sign the contract involved. Therefore, in this case, the plaintiff claimed that the defendant violated the relevant provisions of the "Commercial Franchise Management Regulations" and had the right to unilaterally terminate the agreement, which was not supported by the court.

Shanghai Qingpu District People's Court (2023) Shanghai 0118 Civil Judgment No. 27974 of the People's Republic of China held that: Regarding the arbitrary termination of the cooling-off period claimed by the plaintiff, Article 12 of the Regulations on the Administration of Commercial Franchises gives the franchisee the right to unilaterally terminate the contract, and the exercise of the unilateral termination right must be within a certain period of time. The reasonable period of time should generally be grasped before the franchisor's operating resources have been actually utilized by the franchisee. In view of the fact that the operating resources of the contract involved are mainly the software system operated by the defendant, in the case that the plaintiff has actually used the defendant's software system to carry out business, there is no legal basis for the plaintiff to exercise the right of unilateral termination of the cooling-off period, and the court does not support it.

The People's Court of Zhangqiu District, Jinan City, Shandong Province (2023) Lu 0114 Minchu Civil Judgment No. 11910 determined that the "cooling-off period" stipulated in Article 12 of the "Commercial Franchise Management Regulations" is generally based on the actual use of franchise resources to carry out operations. And within a reasonable range. In this case, a company failed to prove that Wang has opened a shop under its guidance, that is, Wang has actually used the franchise resources, a company should bear the legal responsibility of not being able to prove, so as a franchisee Wang has the right to unilaterally request the termination of the contract in accordance with the above provisions within a reasonable period of time.

This view has become a general consensus in judicial practice. The Guiding Opinions of Beijing Higher People's Court on Several Issues Concerning the Application of Law in the Trial of Commercial Franchise Contract Disputes [Beijing Gaofa (2011)] also adopted this view. The second paragraph of Article 18 stipulates that: Where the franchisor and the franchisee fail to agree that the franchisee can unilaterally terminate the contract within a certain period of time after the franchise contract is concluded, the franchisee may still unilaterally terminate the contract within a reasonable period of time after the conclusion of the franchise contract, except where the franchisee has actually utilized the operating resources.

Shanghai Putuo District People's Court (2022) Shanghai 0107 Civil Judgment No. 9073 at the beginning of the Republic of China held that according to Article 12 of the Regulations on the Administration of Commercial Franchise, the contract involved in the case was signed on October 20, 2020. As the legal representative and sole shareholder of Huaiankang Liyi Trading Co., Ltd., the plaintiff proposed to terminate the contract on January 4 of the following year due to incomplete product information and authorization procedures, which was reasonable, moreover, it has not yet opened a store to carry out business activities and has not actually mastered or used the defendant's business resources. Therefore, the court supports the request for confirmation that the contract involved in the case is terminated on January 4, 2021.

The People's Court of Panyu District, Guangzhou City, Guangdong Province (2023) Civil Judgment No. 5399 of 0113 Minchu found that according to Article 12 of the Regulations on the Administration of Commercial Franchise, after signing the contract, the defendant did not provide the plaintiff with operational guidance and core technical services, and the plaintiff did not occupy the operating resources of the franchisor defendant. The plaintiff signed the contract and paid on September 24, 2022, and proposed to terminate the contract and refund within one month, it does not exceed the reasonable period of time for the unilateral termination of the franchise contract, and is legal and reasonable. Therefore, our hospital confirmed that the "Brand Authorization Contract" and "Service Contract" were terminated on October 26, 2022, the date on which a company received the notice of termination of the contract.

With regard to the right of discharge of the franchisee during the "cooling-off period", some believe that the two parties must make a clear agreement in the franchise contract, otherwise the franchisee does not enjoy the right of discharge. The first point of view mechanically understands the provisions of the "cooling-off period" clause. If the franchisee's right must be realized in an agreed manner, then the franchisor is in a dominant position and the franchise contract is almost drafted by the franchisor. The possibility of the franchisee's right being excluded is great, which will inevitably lead to the failure of the legislative purpose and the right of the franchisee being emptied. The second view is more reasonable and generally accepted by judicial practice. The legal nature of the right to discharge the franchisee during the "cooling-off period" is manifested in the following aspects:

Shanghai Qingpu District People's Court (2023) Shanghai 0118 Minchu Civil Judgment No. 34415 found that Article 12 of the Regulations on the Administration of Commercial Franchises gives the franchisee the right to unilaterally terminate the contract, and the exercise of the unilateral right of termination must be within a certain period of time. The reasonable period of time should generally be grasped before the franchisor's operating resources have been actually utilized by the franchisee. In this case, although the contract involved did not agree on a cooling-off period clause to give the plaintiff the right to unilaterally rescind, from the actual situation of the case, because XXX company did not provide the plaintiff with any franchise resources, the plaintiff exercised the legal unilateral rescission right on September 18, 2023 after urging to no avail, which was in line with the provisions of Article 12 of the Regulations on the Administration of Commercial Franchises, and the court supported it. The agreement involved in the case was dissolved on the date of the plaintiff's notice to reach such and such company.

The People's Court of Baiyun District, Guangzhou City, Guangdong Province (2022) Yueyu 0111 Civil Judgment No. 8134 found that according to Article 12 of the Regulations on the Administration of Commercial Franchises, the franchisee is given the right to unilaterally terminate the contract, even if the contract concluded by the parties There is no relevant agreement, and the franchisee also enjoys the right to unilaterally terminate the contract within a reasonable period of time.

Hangzhou Railway Transportation Court (2023) Zhejiang 8601 Minchu No. 656 Civil Judgment held that according to Article 12 of the Regulations on the Administration of Commercial Franchises and in combination with this case, although the contract involved has agreed that the cooling-off period is 3 natural days, this period is difficult to play a substantial protective and relief role for Zhang X to investigate and analyze investment risks and restrain investment impulse. In terms of its proportion to the contract performance period, the cooling-off period clause is hardly reasonable, and the agreement involving the specific return of the fee ratio is unreasonable to reduce its liability, increase the liability of the other party, and there is no evidence to reflect that Company A has fulfilled its obligation to prompt, so the format clause is invalid. In order to maintain the principle of fairness to be followed in the conclusion of the contract, Zhang X may claim the right of unilateral discharge within a reasonable period of time after signing the contract in question.

The People's Court of Linping District, Hangzhou City, Zhejiang Province (2023) Zhejiang 0113 Civil Judgment No. 5381 determined: According to Article 12 of the Regulations on Commercial Franchise Management, in this case, the two parties agreed on a cooling-off period, but the entire contract The term is one year, and only giving the plaintiff Wang a 7-day cooling-off period is contrary to the common practice in practice. The contract involved in the case was signed on November 14, 2022. Judging from the existing evidence, since November 29, 2022, the plaintiff Wang mou has repeatedly expressed his intention to terminate the contract involved in the case to the defendant company a. within a reasonable period of time, it should be determined that the franchisee has exercised the unilateral termination right within a reasonable cooling-off period.

Jiangxi Nanchang High-tech Industrial Development Zone People's Court (2020) Jiangxi 0191 Minchu No. 377 Civil Judgment: According to Article 12 of the "Commercial Franchise Management Regulations", the plaintiff has the statutory right to release. Although the original and defendant agreed in the Management Agreement that neither party may unilaterally terminate the contract, the agreement excludes the right of discharge enjoyed by the plaintiff in accordance with the law and shall be null and void. The plaintiff signed the contract in July 2019 and submitted a petition to the court in December 2019 to exercise the right of rescission without excessive delay. Therefore, it claimed to the court to rescind the agreement with the defendant, which was supported by the court.

Beijing Chaoyang District People's Court (2012) Chao Min Chu Zi No. 7581 Civil Judgment held that although there is a clause in the contract between the two parties that "Wang Xiaodong shall not unilaterally request to terminate the contract on the grounds of not actually using business resources", the franchisee's unilateral right of rescission stipulated in the Commercial Franchise Management Regulations is a legal right and cannot be excluded by contract, and from the result, once it can be excluded by agreement, the provision on unilateral right of release is useless and contrary to the spirit of the provision. Therefore, the above-mentioned provisions do not affect Wang Xiaodong's exercise of the statutory unilateral discharge right to terminate the "Commercial Franchise Contract" involved in the case, and the Court supports Wang Xiaodong's request to terminate the "Commercial Franchise Contract" of both parties.