Franchising in Argentina: Prices, Discounts and Promotions

A promotion can increase sales while reducing the cash available to pay rent and wages. Before buying a franchise in Argentina, you need to understand who sets prices and who bears the cost of each discount. Coordinating campaigns across a franchise network helps present a consistent offer to customers, but that coordination needs clear rules and costs you can assess.

1. Identify who can set prices

Ask for the commercial policy alongside the contract and its schedules. Simply being told that the brand has ‘uniform pricing’ is not enough: the term can describe different arrangements with different financial consequences.

It is worth distinguishing between four situations:

• Recommended price: a guideline from which the franchisee may depart, subject to the agreement.
• Mandatory price: a condition intended to require a specific selling price.
• Maximum price: a ceiling above which sales are not permitted.
• Promotional price: a temporary price linked to a campaign and its terms.

Ask whether the same rules apply to in-store sales, the online shop and delivery apps. Also check whether you can offer your own discounts and what approval you need.

In Argentina, franchise agreements are specifically regulated by Articles 1512–1524 of the National Civil and Commercial Code, which came into force in 2015. Article 1512 provides for a proven system, technical know-how and ongoing support in return for payment. This framework does not remove the need to specify how prices and promotions will be managed.

Commercial restrictions must also be assessed in light of Competition Law No. 27,442. Do not assume that every restriction is valid simply because it appears in a contract: seek a legal review of its scope and context.

2. Calculate the margin on a promotional sale

Request documented examples of previous campaigns: the products included, duration, discount applied and allocation of costs between the parties. The aim is not just to find out how much turnover increased, but how much was left from each transaction.

To assess a promotion, calculate the following for each product or order:

Actual sales revenue − goods or materials − packaging − payment processing and delivery fees − variable franchise charges = available contribution.

That contribution still has to cover fixed costs and other expenses. Work with your accountant to treat taxes consistently and avoid comparing figures that include different items.

Pay particular attention to the basis on which royalties are calculated during a campaign. If the customer pays less but a charge is calculated on the list price, the discount may affect your bottom line more than expected.

Also ask how the franchisor provides its contribution: does it reduce your purchase price, issue a credit note or reimburse you later? Announced support is not the same as immediately available funds. Specify the supporting documentation required, the timeframe for crediting or paying the contribution, and the procedure for resolving discrepancies.

3. Agree rules for participating in campaigns

Before signing, propose a contract schedule that clearly sets out your commercial commitments, rather than leaving you dependent on informal instructions. At a minimum, it should clarify:

• Which campaigns are compulsory and which are opt-in.
• How much notice you receive of dates, products and terms.
• Who funds discounts, vouchers, loyalty points and bank-funded offers.
• Whether offers can be combined and who configures this option.
• What happens when stock runs out or demand exceeds operational capacity.
• How exceptions are approved and who handles queries.

Pay attention to shared loyalty programmes. If a customer earns a reward at another outlet and redeems it at yours, you need to know who covers that cost and how transactions are reconciled.

It is also worth agreeing what happens with promotions advertised before your outlet opens. Do not assume that you will be excluded or that you will automatically receive the materials, products or compensation needed to honour them.

4. Review what is promised to consumers

Consumer Protection Law No. 24,240 governs, among other things, consumer information, offers and the effect of advertising on obligations towards consumers. A centrally managed campaign can create obligations for individual outlets, so your review should not stop at the internal allocation of costs.

Ask for each campaign to specify its validity period, participating outlets, sales channels, restrictions and availability where relevant. Agree who corrects inaccurate advertising, how complaints are handled and how refunds are documented. The internal allocation of responsibilities does not remove consumers’ rights.

Practical conclusion: before buying, ask to see a real campaign, calculate its contribution and check that the contract explains who decides, who pays and when reimbursement is made. If you cannot establish those three answers, you do not yet know the cost of participating.