Bianlifeng's zero-yuan franchise under investigation: How can franchisees identify recruitment traps? Lawyer explains legal risks
Recently, the chain convenience store brand Bianlifeng was placed on file for investigation by market regulatory authorities for claiming "zero-yuan franchise" while actually charging high fees in practice. This incident quickly sparked heated discussion among entrepreneurs and franchisee communities. On the surface, it appears to be a dispute over a business model, but behind it lies a series of legal issues involving the validity of franchise contracts, determination of false advertising, and regulation of standard form clauses. For ordinary entrepreneurs, the "zero-yuan" gimmick in franchise solicitation is not uncommon, but the legal risks hidden within are often overlooked. This article, from the perspective of legal practice, sorts out the focal points of controversy in the Bianlifeng incident and interprets how franchisees can use the law to protect themselves before and after signing contracts.
Is zero-franchise-fee a blessing or a trap? The legal boundaries of false advertising.
"Zero-yuan franchise" sounds extremely enticing, but the law imposes clear authenticity requirements on advertising and publicity. Article 4 of the Advertising Law stipulates that advertisements shall not contain false or misleading content, and shall not deceive or mislead consumers. If a brand uses "zero-yuan franchise" as bait but, after the contract is signed, indirectly charges fees through equipment procurement, initial inventory, management fees, or similar items, without having fully disclosed these beforehand, it may constitute false advertising.
The market regulatory authority has filed a case for investigation against Bianlifeng, with the core focus being to verify whether its investment promotion publicity is consistent with the actual fees charged. From a lawyer's perspective, in similar cases, brand owners often defend themselves by arguing that "0 yuan means the franchise fee is zero, not including other fees." However, according to Article 8 of the Consumer Protection Law, consumers have the right to know the true information. If key fee information is not clearly disclosed before contract signing, franchisees may claim that the brand owner has infringed upon their right to know.
In practice, when determining false advertising, courts will comprehensively consider whether the promotional content is sufficient to mislead a reasonable person. For example, in a franchise contract dispute, the brand promoted "zero franchise fee," but the contract appendix specified a 30,000 yuan operation service fee. The court ultimately found that this promotion constituted fraud and supported the franchisee's revocation of the contract. If similar circumstances are verified in the Bianli Feng incident, franchisees can seek legal remedies on this basis.
Standard Terms in Franchise Contracts: Five Details You Must Scrutinize Before Signing
Franchise contracts are usually standard form texts provided by the brand owner, leaving the franchisee with almost no room for negotiation. Pursuant to Article 496 of the Civil Code, the party providing standard terms shall determine the rights and obligations of both parties in accordance with the principle of fairness and shall take reasonable measures to draw the other party's attention to clauses that exempt or mitigate its own liability. If the party fails to perform such duty of notice, the franchisee may claim that such clause does not become part of the contract.
When lawyers handle franchise disputes, they often identify the following high-risk clauses: first, non-refundable franchise fees, where no refund is given regardless of the reason for termination; second, unilateral termination rights, allowing the brand owner to terminate the contract at any time without equivalent rights for the franchisee; third, hidden ongoing payment obligations, such as mandatory monthly purchases of goods of a specified value; fourth, overly restrictive intellectual property usage terms that prevent the franchisee from operating normally; fifth, dispute resolution clauses that designate a jurisdiction unfavorable to the franchisee, increasing the cost of enforcing rights.
Taking “zero-yuan franchise” as an example, if the contract stipulates that “the franchisee must pay 100,000 yuan for equipment before opening,” but this is not mentioned in the promotional materials, the clause may be invalid due to lack of disclosure. Before signing, franchisees must carefully review every clause, particularly content presented in fine print or attached pages. If necessary, they may engage a lawyer to conduct a contract review to avoid falling into traps.
Legal Remedies for Franchise Fraud: Rescission of Contract and Damages
If the brand owner engages in false advertising or fraudulent conduct, the franchisee is not without recourse. Under Article 148 of the Civil Code, where one party, by means of fraud, causes the other party to perform a civil legal act contrary to their true intention, the defrauded party has the right to request a people's court or an arbitration institution to rescind the act. This means that the franchisee may, within one year of becoming aware of the fraudulent conduct, file a lawsuit to request the rescission of the franchise contract.
After the contract is rescinded, pursuant to Article 157 of the Civil Code, the brand owner shall return any property obtained under the contract, and the party at fault shall also compensate the other party for the losses incurred thereby. The losses include direct expenditures such as franchise fees, decoration costs, equipment costs, and rent losses, as well as reasonable indirect losses. In judicial practice, courts are relatively cautious in determining loss compensation, but if it can be proven that the brand owner engaged in malicious fraud, the amount of compensation will be significantly increased.
In the Bianli Feng incident, if the investigation confirms violations in its franchise solicitation practices, franchisees who have already signed contracts may collect evidence such as promotional materials, chat records, and transfer vouchers, and file lawsuits with the court. At the same time, they may also report the matter to market regulatory authorities and request administrative penalties. Although an administrative determination does not directly equate to winning a civil case, it can serve as key evidence. Lawyers advise that franchisees should secure evidence as early as possible to avoid losing the case due to insufficient evidence.
Compliance Trends in Franchise Recruitment and Risk Prevention for Entrepreneurs
Bianlifeng being placed on file for investigation is not an isolated case. In recent years, the State Administration for Market Regulation has repeatedly carried out special crackdowns on chaos in investment recruitment and franchising. For example, the "Measures for the Administration of Filing of Commercial Franchise Operations" issued in 2023 strengthened the franchisor's obligation to disclose information. According to Article 8 of the "Regulations on the Administration of Commercial Franchises," a franchisor shall file with the competent commerce department within 15 days from the date of the first contract signing; franchise projects that have not been filed carry higher risks.
For entrepreneurs, lawyers offer three pieces of advice: First, before signing, verify the franchisor's franchise qualifications by checking the filing records through the Ministry of Commerce's Commercial Franchise Information Management System, and conduct on-site inspections of the operating conditions of directly-operated stores. Second, require the franchisor to provide complete financial data, including single-store profit models, investment return periods, etc., and do not easily trust verbal promises. Third, clearly stipulate liability for breach of contract and exit mechanisms in the contract, such as a "cooling-off period" clause—provincial regulations in some regions allow franchisees to terminate the contract without cause within a certain period after signing.
If you have already fallen victim to franchise fraud, you should promptly consult a professional lawyer to assess the voidability of the contract and the amount of compensation claimable. Guangdong Zhiming Law Firm has long handled franchise contract disputes and has represented multiple franchisees in rights protection cases, successfully recovering losses for clients. We recommend that franchisees organize evidence and conduct a risk assessment before initiating legal proceedings, so as to avoid filing lawsuits blindly.
Conclusion
Bianlifeng's "zero-cost franchise" being investigated serves as a wake-up call for the entire franchising industry. For entrepreneurs, franchising is not a "one-off deal" but a battle of legal risk prevention and control. From advertising and publicity to contract signing, and then to daily operations, every step requires legal awareness as a safeguard. If you are considering franchising or are already embroiled in a dispute, it is advisable to first consult a professional lawyer and use legal weapons to protect the hard-earned money you have invested in your business.
