Food Safety and Standards Authority of India (FSSAI), also called the food authority was found in August 2011 under the sector Food Safety. It is a major part of the agency ‘Ministry of Health and Family Welfare’.
FSSAI License is mandatory before starting any food business.
Food Safety and Standards Act, 2006
The Act (Act no. 34) is a combination of laws that is related to food and the standards, rules and regulations to consider to establish food safety.
The FSSAI falls under the Food Safety and Standards Act.
FSSAI Rules & Regulations – General
Section 92 (1) of the Food Safety and Standards Act, 2006 gives a legal right to the Food Authority to make rules/regulations and standards. After the introduction of the 2006 Act, FSSAI drafted six principal regulations.
Many modifications were made over the years taking into consideration important aspects like food consumption patterns, the introduction of new products, developments in the technology and also understanding the differences between national and international standards for food products.
It is an absolute necessity for the restaurant owners to register under FSSAI. The registration can be easily done on the FSSAI government website.
The registration is divided into 3 categories
Documents required for FSSAI Registration
Food Safety License
Basic Registration: For Turnover less than ₹12 Lakh
State License: For Turnover between ₹12 Lakh to ₹20 Crore
Central License: For Turnover above ₹20 Crore
The eligibility criteria differ based on the type of registration
For Basic License Registration
These apply to all the business operators that are operating only in one particular state, city without any branches anywhere else. They have to register under FSSAI with the name ‘Basic FBO’.
The terms for eligibility for a Basic certificate are as follows:
State Food License
Annual turnover of the business - between Rs. 12 Lakh up to a maximum of Rs. 20 crores.
Applicable for- FSSAI State License
Apply to - the state government where the business is based
Central Food License
Eligibility requirement- turnover above Rs. 20 crores
License to be applied to - the Central Government
The FBOs having more than one branch of restaurants or food joints require to apply for a Central Food License.
FBOs operating in 2 or more states have to apply for one Central License for its Registered Head Office and separate license or registration for all branches as per the eligibility standards applicable to them. Following Food Businesses require to apply for FSSAI central license by the governing authority:
Foreign Franchise Outlets in India
Franchising is when the owner of the business gives permission to a third party to establish and run a business.
A lot of international brands have been functioning in India for many years. India is the second-largest franchise market in the world after the US which includes 4600 franchisers at present
Some of the major U.S brands that operate in India include Dunkin Donuts, Levis, KFC, Baskin Robbins, Dior, Calvin Klein, Aeropostale, Guess.
The Indian Franchise Industry contributes $50.4 billion in the market, according to the report of Franchise Association of India(FAI).
India does not have any rules and regulations specifically for the purpose of franchising, but certain laws are applicable in the business.
Some of these rules and laws that apply to the franchise are the laws prescribed in the below Acts-
The franchisors are also required to follow the rules of Foreign Direct Investment(FDI) as ‘foreign investors’.
According to The Trademark Rules, 2017, the international companies operating in India are supposed to file for a trademark of their brand name.
Bankruptcy is one of the major issues, which was faced by some of the largest companies this year.
As per the rules in the Insolvency and Bankruptcy Code, 2016, the contract between a franchisor and a franchisee must mention that the franchisor can immediately terminate an agreement if the business files for bankruptcy.
The law that concerns resolving the franchisor-franchisee dispute is quite flexible. The franchisor has been given the option to specify the country where the dispute would be resolved.
With the rapid growth of the Franchise Business in India and the fact that it has occupied a huge market size and brought in a lot of employment and other benefits, it is extremely important to have a legal framework and specific rules and regulations that will make the franchise business effortless.
It will also be beneficial if the challenges that come along while setting up a franchise is eliminated, be it the high real estate charges or the high royalty fees for the international companies to function in India.