Buying a Franchise: Premises and Operating Approval in Argentina

Premises may match a brand’s look and feel yet still be unsuitable for opening its franchise. Restrictions on use, inadequate services or poorly coordinated lease arrangements can leave you paying for a business you cannot operate. Before joining a franchise network in Argentina, assess the suitability of the property separately from your choice of brand.

1. Separate brand approval from permission to operate

The franchisor’s commercial approval confirms that the property suits its format. It does not replace operating approval or any other authorisations required for the activity. Nor does it guarantee that the necessary works are technically or legally feasible.

In Argentina, franchise agreements are specifically governed by Articles 1512 to 1524 of the national Civil and Commercial Code, which have been in force since 2015. This framework regulates the relationship between franchisor and franchisee, but does not grant blanket permission to open business premises.

Premises requirements depend on the jurisdiction, the business sector and the characteristics of the property. Municipal authorities, the authorities of the Autonomous City of Buenos Aires, and provincial or national bodies may be involved, depending on the circumstances. A clothing shop will not necessarily face the same requirements as a food business.

Article 1514 also sets out obligations for the franchisor, such as providing an operations manual and technical assistance. Do not assume that this assistance includes applying for permissions or guaranteeing that they will be granted: ask for the agreement to specify who checks, manages and pays for each requirement.

2. Check feasibility before paying a holding deposit

Ask the franchisor for a technical specification for the format: floor area, electrical capacity, ventilation, toilet facilities, accessibility, storage, and loading and unloading requirements. For food businesses, add requirements relating to food preparation, storage and extraction.

Use this specification to commission an assessment from a suitably qualified local professional. The aim is not to obtain an informal opinion, but to identify obstacles and the conditions that must be met before proceeding.

The assessment should cover:

• Permitted activity: whether the intended use is allowed at that location and under what conditions.
• Property status: available plans, whether they match the existing building, and records of previous works or approvals.
• Services and systems: electrical capacity, gas where relevant, ventilation and fire protection.
• Private restrictions: the rules governing the jointly owned building, the landlord’s consent, and limits on signage, equipment or ductwork.
• Additional procedures: health, environmental or other requirements applicable to the actual operation.

Do not treat an existing operating approval as sufficient assurance. It may relate to a different operator, activity or layout, and you must check with the competent authority whether it remains valid or can be transferred.

Keep official responses and technical reports. The statement ‘there has always been a similar business here’ is no substitute for these checks.

3. Coordinate the lease, building works and franchise agreement

Risk increases when you make commitments at different stages: you pay the franchise entry fee, reserve the property and only then discover that you cannot install the required extraction system. To avoid this, prepare a single timetable covering the milestones for all three processes.

Before signing, take legal advice and negotiate provisions that account for the technical approval of the premises and the likelihood of obtaining the necessary permissions. A holding deposit is not automatically refundable if operating approval is refused. It must be clear which condition allows you to recover your money, how you must demonstrate that it has been met, and within what timeframe.

When reviewing the lease, pay particular attention to:

• The permitted use and whether it matches the franchise’s activity.
• Consent to carry out works, install equipment and put up signage.
• The handover date, the condition of the property and when rent becomes payable.
• How responsibility for repairs and alterations is divided between landlord and tenant.
• Whether the lease term is compatible with the planned operating period.

In the franchise agreement, specify when the term begins, what triggers recurring payments and how delays to opening are handled. Do not assume that an administrative delay suspends these obligations.

4. Budget for the cost of reaching opening day

Separate the fit-out budget from the expenses that build up while the premises remain closed. As well as works and equipment, allow for professional fees, applicable application and administrative costs, insurance, utilities and rent during preparation.

Request quotations with a clearly defined scope: included works, exclusions, taxes, validity period and the procedure for approving extras. If an installation depends on consent from the building’s owners’ association or an increase in utility supply capacity, mark it as outstanding; do not treat it as resolved.

Compile a file containing the brand’s written approval, the technical report, enquiries made to the relevant authorities, the landlord’s authorisations and the quotations. Assign a responsible person and a deadline to each outstanding item before committing to further payments.

Practical conclusion: proceed with the premises when you can demonstrate three things: that the activity is permitted, that the necessary alterations are feasible, and that the contracts address what happens if opening is delayed. An attractive location matters, but it does not replace these checks.