Franchise manuals: what to assess before buying

Before buying a franchise in Brazil, you need to understand not only the agreement but also the manuals that will guide its operation. These may set out customer service, cleaning, quality control and administrative procedures, with direct implications for costs and responsibilities. Within a franchise network, standardisation helps preserve the brand’s identity. For prospective franchisees, the key is to establish which obligations come with those standards and how they might change.

1. Understand what the law requires regarding manuals

Brazil’s Law No. 13,966/2019, known as the Franchise Law, requires the Franchise Disclosure Document (Circular de Oferta de Franquia, or COF) to state what the franchisor provides in relation to franchise manuals, and on what terms. This requirement appears in Article 2, item XIII, subparagraph ‘f’.

This does not mean that the law requires all manuals to be attached to the COF. However, the standard franchise agreement and, where applicable, the preliminary agreement must be provided in full, including their annexes, under item XVI of the same article. If a manual formally forms part of those annexes, ask your lawyer to check which documentation must be supplied.

The COF must be delivered at least ten days before you sign the agreement or preliminary agreement, or pay any fee to the franchisor or a person or company connected with it. This is a minimum advance disclosure period, not a deadline for completing your review.

The key point is to establish whether the agreement makes the manuals contractually binding. Look for references to mandatory compliance, updates to standards and the consequences of non-compliance. Do not treat these documents as mere reference material if the draft agreement gives them contractual force.

2. Request enough access to assess your obligations

Ask for a list of existing manuals, including each title, version and date of last update. Ask when each document will be made available: during the selection process, after signing or only during training.

It is understandable that the franchisor will want to protect confidential know-how. You could propose supervised access or access subject to a confidentiality undertaking reviewed by your lawyer. The aim is not to obtain permission to reproduce the network’s methods, but to assess your responsibilities before accepting them.

If full access is not available at this stage, ask for at least a documented overview of the requirements that affect costs, facilities and day-to-day operations. Pay particular attention to:

• how often procedures must be carried out and records kept;
• the materials and services needed to meet the standards;
• activities that require external contractors;
• documents that must be available for inspections by the franchise network;
• deadlines for correcting shortcomings identified during assessments.

Receiving only a table of contents helps you understand the topics covered, but does not allow you to assess every obligation. If significant requirements remain unavailable for review, consider postponing your decision until their scope is clear.

3. Turn the procedures into a cost estimate

Create a simple spreadsheet with four columns: requirement, frequency, resources needed and estimated cost. Separate tasks that can be absorbed into normal operations from additional expenses, such as technical testing, specialist services or regularly used materials.

For example, a mandatory cleaning and sanitising procedure may require specific products, staff time and records confirming completion. The point is not to question the need for proper care, but to check whether these resources have been included in the outlet’s projected expenses.

Ask the franchisor to explain how mandatory procedures are reflected in the financial projections provided. Check the figures against quotes relevant to the Brazilian city where you plan to operate and the intended scale of the business.

Also consider the time needed to complete routine procedures. A seemingly cost-free procedure may take hours of work and require tasks to be reorganised. The cost of meeting a standard includes money, time and the capacity to carry it out.

4. Check how updates will be communicated and implemented

Manuals need to evolve, but changes can generate expenses during the term of the agreement. Before signing, check who can amend them, how new versions will be communicated and when they take effect.

Ask whether a distinction is made between a procedural correction, an urgent change to comply with the law and a change requiring significant investment. Look for transition arrangements, designated contacts for queries and rules for confirming receipt of updates.

Do not assume there is a general statutory cap on spending resulting from these changes: Brazil’s Franchise Law sets no such limit. With legal support, discuss contractual provisions that make future obligations more predictable, advance notice requirements and how changes with a financial impact will be handled.

Ask for examples of previous updates and the time allowed to implement them. These do not guarantee future conduct, but they can help you assess the network’s approach in practice.

Practical summary: before buying, identify which manuals are binding on you, estimate the cost of complying with them and clarify how they may change. Do not take on significant responsibilities whose content and impact you have not yet been able to assess.