XN000022-1994-12-14 — Page 71

49.

Answer:

The word "franchise", in the context of modern commerce, has no legal definition and can apply to a variable range of business arrangements. Nevertheless, the term generally refers to all of those types of arrangement whereby a person who has the exclusive right to conduct a certain type of business authorises another person to conduct that business within certain limitation. Normally, this involves the payment of a premium by the latter to the former.

Without referring to particulars of the structure of franchise arrangements, which can vary greatly, it is noted that franchises generally involve the kind of arm's length negotiation between two parties that the Government has traditionally not interfered with. In the absence of fraud, the relationship between franchisers and franchisees would be subject to the rights and remedies which exist under contract law. The Administration sees no evidence that franchisees require legal protection in addition to that afforded generally to other contractors. Where fraud is involved in relation to a particular type of franchise, attention could be given to those types of franchises in the light of existing criminal or regulatory laws.

In the light of the foregoing, the Administration has no plan to introduce specific legislation to govern or regulate the "franchise" mode of doing business.

End/Wednesday, December 14, 1994

Operation of Jockey Club

Following is a question by the Hon Cheung Man-kwong and a written reply by the Secretary for Home Affairs, Mr Michael Suen, in the Legislative Council today (Wednesday):

Question: Regarding the Royal Hong Kong Jockey Club (RHKJC)'s privilege to operate gambling business in the territory, will the Government inform this Council whether:

(a) it is aware of (i) the RHKJC's organisational structure, (ii) the electoral arrangements for its Board of Stewards, (iii) the distribution of its financial income, and (iv) the allocation of its revenue for public and charity purposes; if so, what the details are in respect of (iii) and (iv) for the past three years; an