There are several different laws that that regulate Franchising in India. Some of these are:
Taxation Laws: The Taxation Law in India regulates the tax liability of the parties involved aspect of the Franchising association. For example: Income Tax Act, 1961 ensures that anyoneminting money on Indian soil pays the requsite taxes. Where the franchisor receives royalties, service or franchise fees, tax has to be paid under the income tax act (as income arising and accruing in India), whether the franchisor is an Indian or foreign party. In a case where the foreign franchisor sends training personnel and supervisors to India, the salaries payable to these persons may be subject to personal income tax, whether an arrangement is made to deduct the tax at source or they are taxed as self-employed persons (if they come as consultants).
Indian Contract Act,1972: The association of the parties involved in Franchising process in India is governed by the Indian Contract Act, 1872 by regulating the Franchising Agreement between the two.
Competition Act, 2000: Competition Act, 2000 ensures that the Franchising association only promotes healthy competition in India. The Franchising association should not have an appreciable adverse effect on competition in India.
Intellectual Property Laws: The Franchising association between parties involves exchange or sharing of Intellectual Property, for example: trademarks. The feature of Franchising association is regulated by the Intellectual Property Laws in India.