Delivering the COF: organise the process before offering franchises

Turning a business into a franchise takes more than preparing documents: you must ensure that every prospective franchisee receives the right information at the right time. In franchising, transparency starts before any agreement is signed. For businesses expanding through franchising for the first time, organising delivery of Brazil’s franchise disclosure document, the Circular de Oferta de Franquia (COF), prevents pressure to close a sale from undermining a relationship that should begin with trust.

1. Understand the waiting period and the actions it restricts

Law No. 13,966/2019, known as Brazil’s Franchise Law, regulates business franchising in Brazil and repealed Law No. 8,955/1994. Article 2 requires the COF to be written in Portuguese, in clear, objective and accessible language, and to contain the mandatory information specified by law.

Paragraph 1 requires the document to be delivered to the prospective franchisee at least ten days before the franchise agreement or preliminary franchise agreement is signed, or any type of fee is paid to the franchisor or to a company or person connected with it. Delivering the COF before the final agreement is therefore not enough if one of these other actions takes place first.

In the normal sales process, treat this waiting period as a mandatory hold. Do not collect a reservation fee during the review period simply because it has been given a different name. Refer any proposed advance charge for legal review.

The law sets out a specific rule for tendering or pre-qualification procedures run by a public body or entity: in these cases, the COF must be made available at the start of the selection process.

Failure to observe the waiting period may provide grounds for seeking annulment or a declaration of invalidity, as applicable, and repayment of sums in accordance with the law. This is not a formality that a prospective franchisee can simply waive because they have already decided to invest.

2. Deliver a complete, clearly identifiable version

Before sending out the first COF, decide who is responsible for gathering information, reviewing the content and authorising distribution. A small company may assign several tasks to the same person, but it still needs to separate preparation from final approval.

Create a checklist based on Article 2 of the law. It should cover every applicable requirement, not just the best-known ones, such as investment, fees and territory. The full standard-form agreement and, where applicable, the preliminary agreement, together with their annexes, also form part of the required content.

Give each edition a simple identifier: a date, version number and the person responsible for approval. Keep an unalterable copy of the complete set of documents sent. This allows you to demonstrate not only that delivery took place, but exactly what was delivered.

Before release, check:

• that all referenced annexes accompany the document;
• that the files open and are legible;
• that the amounts and terms match the contractual documents;
• that there are no provisional fields or contradictory information;
• that the recipient has been correctly identified.

Do not present a COF as final while essential decisions about the business model remain outstanding.

3. Prove delivery and prevent premature progress

Choose a procedure that allows you to prove receipt and identify the recipient, the date and the version provided. Assess the delivery method with legal advisers, particularly if the process is electronic.

A sent message alone may leave doubts about access to attachments or actual receipt. Prefer a solution that preserves verifiable evidence and allows the prospective franchisee to keep their own copy. A web link whose content can be changed without a version history makes this harder to prove.

Keep a record for each prospective franchisee containing four elements: the version received, evidence of delivery, the date of receipt and the earliest date on which the actions subject to the waiting period may take place, verified using the applicable legal rules for calculating time limits.

Integrate this control into sales and finance procedures. Staff issuing payment requests must be able to see the hold, as must those arranging signatures. Do not leave legal compliance dependent on a salesperson’s memory.

The delivery acknowledgement should record receipt without serving as advance acceptance of the deal or a waiver of rights.

4. Keep a traceable record of questions and changes

During the review period, provide a channel for questions and record relevant answers. Clarifying a clause is different from promising a term that does not appear in the documents.

If negotiations change the investment, obligations or other material terms, refer the change for legal review. Do not silently replace files. Identify the new version, explain what has changed and assess whether fresh delivery and a restart of the waiting period are required, rather than assuming that the earlier delivery remains sufficient.

Before entering into the agreement, carry out a final check that the COF delivered is consistent with the documents to be signed.

In practice: only authorise signing or payment requests once you have confirmed that the document is complete, receipt is proven and the statutory waiting period has been observed. This simple control safeguards expansion and respects the future franchisee’s decision-making process.