Cambodia has a rapidly growing economy, with a still impressive growth rate of 7.7% between 1995 and 2018 (World Bank Scoreboard, Cambodia). During this period, Cambodia moved from the World Bank to a low-income country to a low-middle-income country. In addition, a considerable middle class had developed, especially in Phnom Penh. In addition to economic growth, growing middle class and a welcoming investment framework, Cambodia has seen the entry of a series of international franchises, including Burger King, Carl`s Jr,, Circle K, Cold Stone Creamery, Domino`s Pizza, Krispy Kreme, L`Occitane, Levi`s, Lotteria, Pandora and Starbucks. The choice of the law of a foreign country as the law applicable to a franchise agreement is not contrary to Cambodian law. In practice, however, local courts may not be willing to apply foreign law to disputes before them. In addition, some questions (for example. (B advertising, real estate and zoning permit requirements) can only be regulated by Cambodian legislation. On January 13, 2020, the Intellectual Property Rights Division of the Ministry of Commerce (“MoC”) adopted a prakas on the procedure for registering licenses and franchise agreements. The Prakas was adopted to implement the Law on Trademarks, Trade Names and Unfair Competition Laws and ensure fair competition for the protection of investors` intellectual property in Cambodia with regard to goods or services under a licensing and franchise agreement. This practice applies to the following: while Cambodian law does not require pre-contractual disclosure, all information contained in a franchise agreement must be correct. Under the Civil Code, a party who rejects a contract on the basis of the misrepresentation of another party has the right to terminate the contract and claim damages from the party who misrepresented the contract. In addition, according to the same legislation, a personal guarantee is not valid if the guarantor has not been fully informed of all the essential information relating to the guaranteed commitment at the time of signing the guarantee.
In current practice, the DIPR requires that franchise agreements and licensing agreements be translated into Khmer, and these translations must be certified by notaries public. Qualified translators can be lawyers, notaries, trademark agents or licensed translation companies. Patent and design licenses must be registered with the Ministry of Industry and Handicrafts. In addition, Cambodia has concluded international agreements with China, the European Union and Singapore on the validation of patents filed for the first time in these countries. The registration of a license/franchise agreement is valid for a maximum of five years depending on the duration of the contract and the validity of the trademark(s) in the contract. The renewal of a license/franchise agreement may be submitted to the Recordal six months before the expiry date. If a license agreement is not registered with the DIPR, the license agreement remains valid and enforceable between the licensor and the licensee. However, the disadvantage of not registering the license agreement is that it does not affect third parties. In addition, failure to register a license agreement may be established by the licensor/franchisee and/or licensee/franchisee or its brand representative. If the parties are a natural person, the donors/franchisees as well as the licensees/franchisees must indicate the name, nationality and permanent address.
If the parties are a legal person, it is necessary that they indicate the name of the company, their nationality and the address of the registration. If the applicant`s habitual residence or registered office is outside the Kingdom of Cambodia, he or she shall be represented by a trademark representative established and practising in the Kingdom of Cambodia. . . .