Yes. The franchisee may not be capable of running its business properly, or it may not be sufficiently capitalised. In addition, the franchisor might fail to maintain a high quality level of continuing support services or it may make mistakes or policy decisions that hurt the franchisee.
There is no specific legislation governing franchising operations in Hong Kong. There are no exchange controls, anti-trust laws, or foreign equity participation or local management participation regulations. Disputes arising from the franchise agreement will be subject to the common law (and specifically the principles of contract law) and to the legislation relating to the registration, licensing and protection of intellectual property rights. Such legislation includes the Trade Marks Ordinance (Cap. 43), Trade Descriptions Ordinance (Cap. 362), Copyright Ordinance (1997), Registered Designs Ordinance (1997), and Patents Ordinance (1997).