Technology for franchises: prepare your systems before expanding

A system that works well for a company-owned outlet is not necessarily ready for a franchise network. Personal spreadsheets, shared logins and solutions that depend on the founder can make expansion difficult. Before franchising your business, build a technology foundation that works across independent companies, with predictable costs and clear responsibilities. For franchise networks, this preparation helps turn individual tools into reliable operational infrastructure.

1. Define what your systems need to do

Start with the activities, rather than signing up for a platform. List the processes that depend on technology: sales, scheduling, stock control, purchasing, payment collection, issuing tax documents and monitoring performance. For each one, record the tool used, who manages it and what information needs to pass between the outlet and the franchisor.

Also identify tasks carried out outside the system. If the daily close requires the founder to correct a spreadsheet, that is a dependency to resolve before handing the model over to another business owner.

Divide your requirements into three groups:

• Essential for operations: without these, the outlet cannot sell, serve customers or meet its obligations.
• Necessary for network management: these allow information to be consolidated and business performance to be monitored against consistent criteria.
• Optional: these add convenience but are not essential to making the model work.

This classification helps avoid imposing expensive tools simply because the original business already uses them. It also allows you to define the minimum set of systems needed to open a franchise, leaving non-essential improvements for a later stage.

The result should be a clear list of requirements, not just a list of software brands.

2. Check that the solution supports independent companies

A chain of outlets under one owner and a franchise network have different needs. Before choosing or retaining a system, ask the supplier for a demonstration involving a franchisor and two outlets owned by separate companies.

Check that each outlet can manage its own operations and that the franchisor receives only the access needed for its agreed functions. Also check that reports use consistent definitions: gross revenue, cancellations and discounts, for example, must mean the same thing across the network to allow useful comparisons.

Include practical questions in your assessment:

• Who takes out the licence and receives the bill?
• Does the supplier permit use by companies with different CNPJ numbers — Brazil’s corporate tax registration numbers — under the proposed terms?
• How do installation, configuration and integration between tools work?
• Can records be exported in a usable format?
• What happens if the connection or system becomes unavailable?
• Who handles faults outside normal business hours?

Test complete workflows, such as a sale, cancellation, end-of-day close and reconciliation of amounts. Do not limit yourself to looking at screens. Tax-related functions should be checked with accounting support, taking the outlet’s business activity and location into account.

Record the problems identified, the agreed solution and the person responsible for confirming that the tool is ready to use.

3. Make costs and obligations transparent

In Brazil, Law No. 13,966/2019, known as the Franchise Law, governs business franchising. Article 2 requires the Franchise Disclosure Document, known locally as the Circular de Oferta de Franquia (COF), to explain what the franchisor offers and on what terms, including arrangements for introducing technological innovations into franchises.

The law also requires clear information about recurring fees and other amounts paid to the franchisor or to third parties it designates, detailing how those charges are calculated and what they cover. Where franchisees must purchase goods or services from designated and approved suppliers, that obligation must be disclosed, along with a list of those suppliers.

In practice, itemise the costs of implementation, subscriptions, equipment, integrations, technical support and any usage-based charges separately. State what is included in other fees and what must be contracted separately. Avoid presenting the software’s basic monthly subscription as the total cost.

Ensure these terms are consistent across the COF, the franchise agreement and the technology contracts, with legal review. The COF must be provided at least ten days before the franchise agreement or preliminary agreement is signed, or before any fee is paid to the franchisor or to a person or company connected with it.

4. Plan for updates and disruption

Preparing your technology does not end with choosing a supplier. Define how new versions, equipment replacements and platform changes will be assessed. A seemingly simple update may require training, data migration and a temporary interruption to operations.

Establish an approval process: identify the need, test the change, estimate its financial and operational impact, notify outlets and monitor implementation. Distinguish urgent fixes from improvements that can be scheduled. Costs and obligations must comply with the agreed contractual terms; do not assume unlimited authority to impose additional expenses.

Also prepare a contingency procedure: who to contact, which activities can continue and how to check records once service is restored. Do not improvise workarounds that compromise tax compliance or information security.

Putting it into practice: before offering your first franchise, bring together requirements, tests, costs and update policies in a decision document. Only approve the solution once it is clear who signs the contracts, who pays and who resolves each type of problem.