Buying a Franchise in Colombia: Assessing the Pilot Business

An outlet full of customers may look attractive, but that alone does not prove that someone else can replicate how it operates. Before buying a franchise in Colombia, it is worth assessing the pilot business: the operation used to test the model you are being offered. In franchising, this assessment helps distinguish a transferable business model from success that depends on circumstances that are difficult to reproduce.

1. Identify what has actually been tested

A pilot business is a unit used to check how a business concept works under real operating conditions. It should not be confused with a showroom, a financial forecast or premises newly fitted out to welcome prospective buyers.

Ask which unit serves as the reference operation, how long it has been trading and which aspects of the model have been tested there. You should also establish whether the format on offer matches the one tested: a large restaurant does not automatically validate a small takeaway outlet.

Request a simple fact sheet describing:

• The type of premises and the space required to operate.
• The products or services actually sold.
• The staff roles and shifts used on a typical working day.
• The essential equipment, systems and processes.
• The changes introduced after problems were identified.

The key question is not whether the pilot works, but under what conditions it works. If those conditions will not be available at your future unit, the model’s transferability has yet to be demonstrated.

2. Observe the operation rather than relying on a presentation

Arrange a visit during a normal working day. If possible, observe both quiet and busy periods. Respect access rules, confidentiality and the privacy of staff and customers; assessing the business does not mean intervening in its service.

Follow an order or service from start to finish. Who receives the request? How is the work organised? What happens when a supply runs out, a customer returns something or a piece of equipment fails? Exceptions reveal how much of the operation is supported by established processes and how much depends on improvisation.

Pay particular attention to the founder’s presence. An apparently simple process may only work because that person authorises every discount, resolves every complaint or maintains personal relationships with suppliers.

Ask how the outlet operates when the founder is away. Look for verifiable examples: shift supervisors, incident logs or procedures that other staff can follow. There is no need to arrange an artificial absence; the aim is to understand everyday practice.

Record each dependency in three columns: what happens, who resolves it and how it would be resolved in my unit. A blank in the final column points to an issue that needs addressing before you invest.

3. Separate the method from advantages you cannot replicate

A pilot may benefit from owner-owned premises, equipment shared with another business or administrative work carried out by people who do not appear in its staffing structure. These conditions do not invalidate the model, but they need to be made clear.

Pay particular attention to resources you would have to source and pay for separately. For example, if the founder personally carries out quality control, ask what mechanism will replace that involvement when units operate further afield.

Also check whether the instructions allow others to repeat the work. Without demanding advance access to every trade secret, you can request a demonstration of a procedure or review a list of documented processes under confidentiality arrangements. The aim here is not to negotiate training, but to establish that a transferable method exists.

Prepare a list of differences between the pilot and the unit on offer. For each difference, ask for an explanation of the planned adaptation and the evidence supporting its viability. Classify each as proven, adaptable with supporting evidence or still to be verified. Do not mistake a sales expectation for operational certainty.

4. Use your findings to inform the purchase decision

In Colombia, a franchise agreement is an ‘atypical’ contract: it has no specific, comprehensive statutory framework of its own. It is governed by the agreed terms, the Colombian Commercial Code and applicable civil law provisions. Good faith also matters during contract negotiations and performance.

There is no specific legal obligation to conduct pilot tests before offering franchises. The existence of a reference unit therefore does not amount to official certification. Its absence calls for greater caution, rather than an automatic conclusion that the offer is unlawful.

Nor should the draft decree published by Colombia’s Ministry of Trade, Industry and Tourism in 2021 be confused with legislation in force requiring a franchise offering circular or a mandatory deadline for providing it.

With legal advice, clearly identify the features of the model on which your decision rests and the specific obligations needed to replicate it. If essential adaptations remain untested, consider postponing signing rather than assuming they will be resolved later.

Practical conclusion: before buying, complete this sentence with evidence: ‘This unit can operate without the founder because…’. If the answer depends on promises or resources you will not have, you have not yet established a sound basis for the purchase.