How to manage promises when selling franchises in Argentina

When franchising an existing business, a promise made during a meeting can create expectations that the operation is not equipped to meet. A sound contract is not enough: you also need to manage what the owner, sales team and intermediaries say. In franchising, a sustainable relationship starts with clear, verifiable and consistent commitments.

1. Separate commitments from possibilities

Before approaching prospective franchisees, review the language you use to present the business. Phrases such as “we take care of everything”, “you’ll have exclusivity” or “the premises will open in no time” may sound like sales language, but they can be interpreted as specific obligations.

Prepare an approved claims matrix. This does not replace the proposal or contract: it helps anyone selling the franchise understand what they can promise and what requires a case-by-case assessment.

For each claim, record:

• Scope: exactly what is offered and what is excluded.
• Supporting evidence: the documents, experience or resources that substantiate it.
• Conditions: what delivery depends on.
• Authority: who can approve an exception.
• Review date: when the information needs to be checked.

For example, “we support you through the opening” should translate into identifiable tasks: reviewing the timetable, advising on equipment or providing an adviser for a defined period. It should not be confused with taking responsibility for building work, obtaining operating permits or hiring staff on the franchisee’s behalf.

The rule is simple: if a claim could influence an investment decision, do not leave it to improvisation.

2. Apply the legal framework to pre-contract discussions

In Argentina, franchise agreements are specifically regulated by Articles 1512 to 1524 of the national Civil and Commercial Code. They should not be treated as an arrangement without its own regulatory framework, nor should proposed legislation be confused with laws already in force.

Article 991 also requires parties to act in good faith during preliminary negotiations, even before a contractual offer exists. Unjustifiably breaking off those negotiations may give rise to liability for losses suffered by someone who, through no fault of their own, relied on the contract being concluded. The sales process is therefore not exempt from legal obligations.

Article 1514(a) imposes a specific obligation on the franchisor: before signing, it must provide economic and financial information covering two years of performance by units similar to the one being offered, which have operated for a sufficient period in Argentina or abroad. Sales enthusiasm or a general statement about the brand’s success does not fulfil that obligation.

These articles do not set a general twenty-day deadline for providing pre-contract information. As a precaution, arrange to supply it early enough for the prospective franchisee and their advisers to review it and raise questions, without presenting an internal deadline as a legal requirement.

Do not assume that a generic “no promises” clause will resolve every earlier contradiction, either. Seek legal advice on your communications and their consistency with the agreement ultimately signed.

3. Define who can approve exceptions

When the founder attends every meeting, they often approve concessions on the spot. Once recruitment is delegated, that habit can spread: one person offers extra support while another promises terms that have never been approved.

Establish a short approval process for exceptions:

1. The salesperson records the prospect’s request without implying that it has been accepted.
2. The relevant team assesses whether it can deliver and what resources it would need.
3. The authorised person approves or rejects the proposal.
4. The decision is communicated in writing and included in the relevant documentation.

Apply the same approach to consultants and intermediaries. Their instructions should specify which materials they may use, which terms they may negotiate and which matters require authorisation. Prevent outdated presentations or messages prepared for another candidate from circulating.

A useful response is: “We can assess that level of support, but it is not currently included or approved.” This keeps the conversation open without turning a possibility into a commitment.

4. End each stage with a documented confirmation

After an important meeting, send a brief summary covering the topics discussed, documents supplied, outstanding terms and next steps. If there was a mistake, correct it explicitly; changing a presentation without telling the prospect does not remove the earlier expectation.

Keep versions of proposals and an organised record of communications. Before signing, compare the contract with the approved commitments and ask the prospective franchisee what they understand they will receive. An unexpected answer can reveal misunderstandings while there is still time to address them.

Watch for three warning signs: artificial pressure to make a decision, support or services described in absolute terms, and benefits that no one within the company acknowledges having authorised.

Put it into practice: before your next sales meeting, choose the five promises you repeat most often and define their scope, supporting evidence and who is responsible for them. Reducing ambiguity is a practical way to build trust.