Franchise software: what to check before you buy

The system that records sales, organises orders and manages the till can determine whether a franchise outlet runs smoothly or grinds to a halt. Before buying a franchise in Brazil, assess its mandatory technology as a financial and contractual commitment, not simply as a tool. Across franchise networks, standardised technology can make management easier, but costs, responsibilities and access to information must be clear.

1. Identify the systems and contracts involved

Ask for a list of the software required to open and run the outlet. This may include point-of-sale systems, stock management, tax document issuance, appointment scheduling, customer relationship management and integrations with delivery platforms. Establish what is covered by the fees paid to the franchisor and what requires a separate contract.

Brazilian Law No. 13,966/2019, known as the Franchise Law, requires the Franchise Disclosure Document (Circular de Oferta de Franquia, or COF) to provide clear information on recurring fees and other amounts payable to the franchisor or designated third parties, including how they are calculated and what they cover. It also requires information on mandatory purchases of goods, services or supplies from designated and approved suppliers.

Mandatory software should therefore not come up only in discussions about setting up the outlet. Check that the relevant documents identify it and set out its charges and terms. Request the licence or subscription agreement, support terms and technical annexes before committing.

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

2. Calculate the full cost, not just the monthly fee

An apparently affordable subscription may depend on additional services. Create a spreadsheet showing each charge, who receives it, when it is due, how it can increase and the cancellation terms. Separate set-up costs from recurring and occasional expenses.

Pay particular attention to:

• implementation, configuration and importing existing records;
• charges per user, terminal, outlet or transaction volume;
• integrations, storage and backups;
• additional training and out-of-hours support;
• version upgrades and changes needed to meet tax requirements;
• data exports and ending the subscription.

Ask whether the price changes as the outlet grows. A licence covering just one terminal may not meet your needs at busy times. Also confirm whether the software requires specific equipment or a particular type of connection.

Compare three scenarios: opening, normal trading and increased demand. There is no need to invent growth percentages: use the outlet's planned capacity and the prices actually quoted. The aim is to identify which operational decisions will increase the bill.

3. Test day-to-day operations and the response to failures

Request a demonstration using real business tasks. Follow a sale, a cancellation, a return and the end-of-day till reconciliation. Check whether the reports allow you to reconcile sales, payments received and charges from the franchise network.

Then work through contingency questions: what happens if the internet goes down? Can the system operate offline temporarily? How are records synchronised? Who resolves a discrepancy between the till and the ordering platform?

The contract should clarify who handles each type of problem: the franchisor, the software developer or a local service provider. Look for support hours, contact channels and any specified response and resolution times. An available support channel does not mean an immediate fix.

Speak to outlets using the same version of the software. Ask about recurring faults, extra charges and the quality of support. Use their experiences to guide your tests, without treating one account as evidence of performance across the whole network.

4. Establish data access and continuity arrangements

Do not assume that paying for the system guarantees unrestricted access to its records. Confirm which reports the franchisee can view, download and retain, including those needed to meet accounting and tax obligations. Ask which file formats are available for export and whether the files can be used outside the platform.

Where customers' or workers' personal data is involved, Brazilian Law No. 13,709/2018, the General Personal Data Protection Law (LGPD), also applies. Responsibilities depend on the activities each party actually carries out; simply assigning a label to the franchisor or outlet in the contract is not enough. Seek specialist advice when assessing access permissions, security measures and incident notification procedures.

Also check the procedures for changing suppliers, suspension for non-payment and the end of the franchise relationship. Negotiate clear export and transition terms that respect legal duties to retain and protect data. Personal information is not an asset that can be used without restriction.

In practice: before signing, gather four pieces of evidence: a list of mandatory systems, a comprehensive cost estimate, an operational test and the rules governing access and transition. If any are missing, ask for clarification before taking on the commitment.