[Direct answer]In the Beijing area, can franchisees return the goods to the headquarters at a loss? This is a practical issue of widespread concern among parties involved. According to the Contract Chapter of the Civil Code of the People's Republic of China (effective January 1, 2021) and the Civil Procedure Law of the People's Republic of China (amended on December 24, 2021, effective January 1, 2022), handling such matters requires grasping the core elements and evidence, and asserting rights in accordance with the law. Whether a favorable outcome can be achieved depends on the clarity of the facts, the adequacy of the evidence, and the choice of legal procedures, rather than the promise of a certain result. It is recommended to sort out the materials as soon as possible, fix key evidence, and formulate a plan with the assistance of a professional lawyer to avoid losing rights due to exceeding the statutory time limit or insufficient evidence. For more details, please refer to the following link:Corporate commercial legal services.

1. Problem background and typical scenarios

Can franchisees return the goods to the headquarters at a loss? Such requests are also quite common in the Beijing area. When handling such matters, it involves both substantive rights and procedural choices. Combined with the above, the following analysis is provided.Legal services for contract disputesBased on practical experience, it is recommended that the parties first clarify their legal relationships before deciding on the path of protecting their rights or negotiating with others.

II. Key points of contention

The disputes in such cases often focus on three aspects: first, the validity and establishment of the contract, and whether the subject's qualifications and expressions of intent are genuine; second, the performance and determination of breach of contract, who constitutes a breach of contract and the degree of the breach; third, the calculation of liability and losses, the adjustment of the breach of contract penalty, and foreseeable rules. Each of these aspects requires written evidence to support them.

III. Professional analysis by Hengluo Lawyers

Based on the practical observations of handling commercial contracts by Henglu Law Firm, many enterprises lose lawsuits due to vague contract terms or insufficient evidence of contract performance. Lawyers usually recommend that major contracts be drafted or reviewed by lawyers to clarify breach of contract and jurisdiction; that email, receipt, and reconciliation records be fully preserved during the performance process; and that timely send letters and apply for preservation measures when breach of contract occurs to prevent the other party from transferring assets.

IV. Practical suggestions and legal basis

The legal basis mainly includes the provisions on the conclusion, effectiveness, performance, breach of contract and termination of contracts in the Contract Chapter of the Civil Code of the People's Republic of China (effective from January 1, 2021) (starting from Article 463); the provisions on shareholders and transactions in the Company Law of the People's Republic of China (amended on December 29, 2023 and effective from July 1, 2024); and the provisions on jurisdiction and preservation in the Civil Procedure Law of the People's Republic of China (amended on December 24, 2021). Practical suggestions: Review the subject and creditworthiness before signing the contract; clearly define the subject matter, payment, and breach of contract in the contract terms; fix the evidence of performance and communication when disputes arise; and apply for property preservation in a timely manner. For debt recovery, it can be combined with other measures.Creditor-debtor relations and enforcement case servicesAdvance.

5. Henglu Law Firm's Reminder

In commercial contracts, the provisions and evidence determine the outcome. There are three key points: review the other party's creditworthiness and performance ability before signing the contract; clearly define the subject matter, payment, breach of contract, and jurisdiction in the provisions; and retain communication and delivery evidence during the performance of the contract. If a dispute arises, take prompt measures to preserve evidence. If professional support is needed, you can seek assistance from relevant professionals or institutions.Special services and other case servicesThe docking team.

In commercial contracts, the terms and evidence determine the outcome. It is recommended to review the other party's creditworthiness and performance capabilities before signing the contract. For major contracts, have a lawyer draft or review them, clarifying the subject matter, payment terms, breach of contract provisions, and jurisdiction clauses. During contract performance, maintain communication and delivery records, and promptly send a letter of default and apply for preservation measures when breaches occur. Disputes often focus on contract validity, who constitutes a breach of contract, and loss calculation. Evidence should be organized around three points: establishment of the contract, performance of the contract, and breach of contract. Hiring a lawyer can help systematically organize contract and performance-related evidence, evaluate litigation or arbitration paths and cost-benefit ratios, and avoid the risk of losing the case due to ambiguous contract terms or insufficient evidence of contract performance. For breach of contract penalties that are either too high or too low, courts and arbitration institutions can adjust them according to law. The claimant should prepare evidence of actual losses to counter the defendant's possible defense of reduction, ensuring that the compensation request is supported.

VI. Frequently Asked Questions

Q1: If a store is losing money and needs to clear its inventory, is the headquarters obligated to repurchase the inventory at the purchase price?

Simply operating at a loss does not constitute a reason for returning goods. If the goods have been delivered and are of satisfactory quality, the risk of unsalability shall be borne by the franchisee himself; there are only three circumstances under which returns are allowed: when the contract explicitly stipulates that returns or exchanges are allowed, when the goods do not meet the quality requirements, or when the headquarters breaches the contract and causes the contract to be terminated, in accordance with Articles 563 and 610 of the Civil Code of the People's Republic of China (effective January 1, 2021). Therefore, first check the return provisions in the contract, then determine whether there are quality or breach of contract issues. It will be difficult to obtain support if a request for a return is made solely on the grounds that the goods are not selling well.

Q2: When requesting a refund for unsalable goods, which types of quality issues do I need to prove?

The following are the five types of materials that need to be prepared: 1. Purchase contracts and return/exchange terms; 2. Acceptance certificates and logistics signing records for each batch of goods; 3. Quality inspection reports and spot-check photos or videos; 4. Inventory count sheets and details of slow-moving inventory; 5. Written communication with headquarters regarding returns and exchanges. If a claim is made for non-compliance with quality standards, the disputed batch should be sent for independent inspection and the retained samples of the same batch should be preserved. Having only inventory figures without quality evidence typically only proves poor business operations, which cannot support a request for returns or prove the headquarters' fault.

Q3: If the refund amount is less than 10,000 yuan, how much should I pay as the litigation acceptance fee?

The amount of the payment determines the acceptance fee. For disputes involving an amount of less than 10,000 yuan, a fee of 50 yuan shall be paid per case; for disputes involving an amount of between 10,000 yuan and 100,000 yuan, the fee shall be 2.5% of the amount in dispute; and for disputes involving an amount of between 100,000 yuan and 200,000 yuan, the fee shall be 2% of the amount in dispute, in accordance with Article 13 (1) of the "Measures for the Payment of Litigation Fees" (effective April 1, 2007). Lawyer's fees shall be negotiated in accordance with the "Measures for the Administration of Lawyer's Service Fees" (effective April 1, 2007) and may be charged on a per-case basis or as a percentage of the subject matter. For return disputes involving relatively small amounts, the litigation costs account for a high proportion, so it is advisable to first negotiate or apply for mediation.

Q4: If I find quality issues after receiving the goods, within how many days should I raise an objection for it to be effective?

There are time limits for raising quality objections. According to Article 621 of the Civil Code of the People's Republic of China (effective January 1, 2021), if the parties have agreed on an inspection period, they shall notify each other within the time limit; if no such agreement has been made, they shall notify each other within a reasonable time limit. If no notification is made within two years from the date of receipt of the goods, it shall be deemed that the quality meets the agreed requirements, unless there is an applicable warranty period. If the claim for a return is raised after the time limit, the court will generally not support it. If any quality problems are found, they should be raised in writing and with evidence as soon as possible.

Q5: After taking inventory of the unsold inventory, which letter should I send to the headquarters today?

Today, I will focus on three tasks: First, store the unsold inventory, number each batch, take photos, and prepare an inventory list; Second, send the disputed batches to a third-party inspection and retain the samples of the same batch; Third, send a written negotiation letter to the headquarters, listing the batch numbers, quantities, quality issues, and return demands. Send the letter by express delivery and keep the receipt. Do not handle the goods at a low price on your own before the negotiation fails, otherwise, the other party may claim for expanded losses and weaken your return claims. The negotiation letter should clearly state the batch numbers, quantities, and amounts, as verbal negotiations are difficult to form effective evidence.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Corporate commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.