Operating licences: prepare your business for franchising

A business operating legally in one Brazilian city does not prove that its operations can be replicated under the same conditions elsewhere. Before turning your business into a franchise, organise the licensing requirements that will apply to each new outlet. Within a franchise network, this preparation helps allocate responsibilities, estimate costs and avoid announcing openings before permission to operate has been secured.

1. Separate franchise rules from operating approvals

Brazil has specific legislation: Law No. 13,966/2019, known as the Franchise Law. It governs the relationship between franchisor and franchisee and requires the provision of a franchise disclosure document, known in Brazil as the Circular de Oferta de Franquia (COF), containing mandatory information about the business.

This law does not, however, replace the approvals required for each establishment’s activities. A franchise agreement grants rights on the agreed terms; it does not serve as a health licence, municipal authorisation or proof of compliance with fire service requirements.

Depending on the activity, the premises and the applicable rules, requirements may cover:

• municipal permission to operate and building use;
• public health and hygiene oversight;
• fire prevention and safety;
• environmental controls and waste disposal;
• oversight by a qualified professional and registration with a professional regulatory body.

Not all these requirements apply to every business. Exemptions or simplified procedures may also be available, depending on the risk classification and the relevant regulations. Do not treat your existing outlet’s experience as a nationwide rule. Confirm each requirement with the responsible authorities and appropriately qualified professionals.

2. Build a requirements matrix by activity

Start by describing what actually happens in your business. For example, “food shop” is not a sufficient description if the operation involves food preparation, refrigerated storage, delivery and on-site consumption. Differences in processes can change the applicable requirements.

Gather the existing outlet’s documents and identify which relate to the company, the establishment, the premises or the professional responsible for technical oversight. Check their validity, any conditions imposed and whether they cover the activities actually being carried out. An old licence does not, on its own, prove that a subsequent expansion has been approved.

Turn this review into a spreadsheet with clearly defined fields:

• Activity or installation: which part of the operation triggers the requirement.
• Competent authority: who provides guidance, assesses applications or grants approval.
• Document or condition: what must be submitted or complied with.
• Dependencies: which steps must be completed before applying.
• Responsibility and cost: who carries out the work, who monitors it and who pays.
• Validity and evidence: how compliance and renewals will be recorded.

Add a column for the source consulted and the date checked. This allows you to distinguish current guidance from informal information received when opening the first shop.

If you have different franchise formats, create separate matrices. A kiosk, a shop with on-site production and a service-only outlet may require different approaches.

3. Make licensing part of the set-up process

Once the matrix is ready, build a schedule around dependencies, rather than simply a desired opening date. Some applications may depend on design plans, completed building works, installed equipment or the appointment of an appropriately qualified professional.

Set decision points before committing resources. For example, do not finalise an equipment specification without checking its installation requirements; do not regard building works as complete if technical documentation is still outstanding; and do not announce an opening while an essential approval remains pending.

For each stage, define the evidence needed to move forward. This might be an approved plan, an issued document or evidence of an applicable exemption. An application receipt should not automatically be treated as permission to operate. Its effect depends on the relevant rules.

Distinguish the time your team needs to complete its work from the public authority’s assessment timescale. Avoid guaranteeing dates that depend on third parties. Plan for different scenarios and record which outstanding issues could change the schedule.

Include the period after opening too: renewals, updates to registration details and changes in activities all need monitoring. Allocating tasks without deciding who tracks expiry dates leaves a significant gap.

4. Align responsibilities and information for prospective franchisees

Before offering the franchise, cross-check the licensing matrix against investment estimates and the obligations set out in your commercial and legal documents.

Law No. 13,966/2019 requires the COF to disclose, among other things, the estimated initial investment and the support the franchisor provides during set-up. If design work, administrative fees or technical services are necessary, account for their impact on the estimate and explain the assumptions and local variations.

Make a clear distinction between guidance and execution. Explaining which documents to request is not the same as preparing plans or obtaining approvals. The agreement should clarify this division without suggesting that a private agreement overrides responsibilities imposed by law.

For private franchise offers, the COF must be provided at least ten days before the contract or preliminary agreement is signed, or any fee is paid to the franchisor or to a person or company connected with it.

Put this into practice: review your current operation’s compliance, build the requirements matrix and assign responsibilities before promising the opening date of your first franchised outlet.