Franchise sales: how to keep sales promises in check

A sales presentation can create obligations for a future franchise network before the first agreement is even signed. When turning a business into a franchise, the owner needs to keep control of claims about investment, results and franchisee support. In franchising, trust starts with consistency between the sales pitch, the documents and what is delivered. The aim is not to weaken the proposition, but to prevent enthusiasm from turning into promises that cannot be kept.

1. Create a single source for all sales information

Before promoting the opportunity, gather everything that will be presented to prospective franchisees: advertisements, lead-generation pages, presentations, spreadsheets, message templates and meeting scripts. Include the founder’s sales pitch too, as it can create expectations even when nothing is put in writing.

Create a table with four fields: sales claim, supporting evidence, person responsible for approval and review date. Every material piece of information needs a verifiable source.

For example, if the presentation says that set-up includes on-site support, record who will provide it, at which stages and within what limits. If it quotes an investment figure, check whether the amount covers everything needed to open the business and which costs depend on the premises or location.

Divide claims into three categories:

• Confirmed provision: something the franchisor will commit to and is able to provide.
• Evidence-based estimate: a calculation subject to clearly stated assumptions and variations.
• Future possibility: an initiative that is not yet available and must not be sold as a contractual benefit.

This classification prevents a planned app, negotiations with a supplier or an intention to expand from being presented as resources already in place.

2. Present results without turning projections into guarantees

The performance of a company-owned operation can help explain the business, but it does not prove that another outlet will achieve the same results. Location, rent, staffing, how established the operation is and the founder’s involvement all affect the comparison.

Whenever you use company figures, specify the period covered and the context. Distinguish between turnover, operating profit and cash available to the owner. Also explain whether the calculation includes costs that a franchised outlet will incur, such as royalties and other specified charges.

In projections, show the assumptions rather than highlighting only the final figure. A sales spreadsheet should make it clear which sales volumes, costs and expenses underpin the estimate. Less favourable scenarios help prospective franchisees assess how sensitive the business is to changes in those assumptions.

Avoid phrases such as “guaranteed profit”, “certain returns” or “risk-free business”. A discreet footnote does not put right a presentation designed to convey certainty.

Prepare answers to common questions. When asked “How much will I earn?”, the team should explain the available data and its limitations, rather than inventing figures to keep the prospect interested.

3. Align the sales process with legal requirements

In Brazil, Law No. 13,966/2019 governs business franchising. Article 2 requires the provision of a franchise disclosure document, known as the Circular de Oferta de Franquia (COF), in Portuguese and in an objective, accessible form, containing mandatory information about the opportunity.

This includes the estimated initial investment, fees, the franchisee’s activities and the support offered. Sales presentations and conversations must therefore be consistent with the terms set out in the COF and the agreement. A presentation is no substitute for these documents.

In a standard private franchise offering, the COF must be provided at least ten days before the agreement or preliminary agreement is signed, or before the franchisee pays any fee to the franchisor or to a person or company connected with it.

Build this requirement into your process as a mandatory control: record delivery of the COF and block signing or payment before the deadline. Do not label a payment as merely “reserving the opportunity” to get around the waiting period.

Have any special terms reviewed by a legal adviser before offering them. Verbally negotiated discounts, exclusivity arrangements or additional services can create significant discrepancies. If there is a material change to the offer, seek advice on updating the documents and on the implications for the disclosure process and statutory waiting period.

4. Define who can make promises, review claims and correct information

Even a small business needs an approval process. Decide who checks the figures, who confirms the ability to deliver and who reviews the legal aspects. The founder must follow this process too.

Make only current versions of sales materials available. Include the date of the latest update, withdraw old files from circulation and instruct any intermediaries not to create their own advertisements or financial illustrations.

After important meetings, send a written summary of the terms discussed. Record outstanding questions and answer them only once the relevant person has approved the response. This reduces differences in interpretation without making every conversation excessively bureaucratic.

If incorrect information has already been presented, correct it clearly before proceeding. Explain what has changed and keep a record of the communication; do not wait for the prospect to discover the discrepancy when reading the agreement.

Put it into practice: review your sales presentation today and flag every promise that lacks supporting evidence or a person responsible for it. Before offering your first franchise, address these gaps and establish a single approved version of the offer.