Franchises in Colombia: limits on changes to the operations manual

Buying a franchise means accepting a way of operating, but also understanding who will be able to change it. An update to the operations manual may require new equipment, refurbishment or digital tools after you open. Franchise networks need to evolve, but that should not mean taking on financial obligations without clear limits. Before signing, check how these changes are approved, communicated and paid for.

1. Identify what can be changed through the manual

The operations manual turns the franchisor’s know-how into instructions for running the outlet. It may describe procedures for customer service, cleaning, presentation, safety or stock management. The risk arises when the contract allows the franchisor to change it unilaterally and requires the franchisee to comply with every new version, without distinguishing between routine adjustments and costly changes.

Ask for the manual’s contents page, its current version and the clause incorporating it into the contract. If it contains confidential information, offer to review it under a confidentiality agreement. Confidentiality should not prevent you from understanding the obligations relevant to your decision to buy.

Classify potential changes into three groups:

• Routine operational changes: changes to presentation, service sequences or monitoring forms that do not require significant investment.
• Changes with a significant financial impact: replacing equipment, taking out software subscriptions, building work or a permanent increase in required tasks.
• Changes to essential contractual terms: new fees, additional guarantees or changes to the agreement’s duration.

Do not accept wording that blurs these categories. Propose that essential financial terms can only be changed by written agreement between the parties, not through an update to the manual.

2. Understand the legal protection available in Colombia

In Colombia, a franchise agreement is an ‘atypical’ contract: there is no dedicated law comprehensively governing its elements, rights and obligations. Nor is there a specific general requirement to provide a franchise disclosure document with standardised content and a prescribed delivery deadline. Colombia’s Ministry of Justice explains that the relationship is governed by the parties’ agreement and the rules applicable to commercial contracts.

This does not mean that every clause is valid or that the contract is your only protection. The Commercial Code applies, as do the Civil Code’s rules on obligations and contracts where relevant. Articles 863 and 871 of the Commercial Code establish duties of good faith at the pre-contractual stage and when entering into and performing the contract, respectively. The prohibition on abuse of rights and mandatory rules applicable to the business activity may also be relevant.

Law 1429 of 2010, concerning business formalisation and job creation, is not a franchise law. A voluntary code of conduct is no substitute for legislation either: check whether it has been incorporated into the contract and what specific commitments it contains.

The practical implication: do not assume that the law sets a notice period or an investment limit for updates to manuals. Negotiate these protections expressly and seek independent legal advice.

3. Negotiate a procedure for costly changes

A useful clause should allow the business model to improve without turning every update into an unpredictable obligation. Ask for the procedure to cover the following:

• Documented notice: an explanation of the change, the outlets affected, the implementation date and the version of the manual being replaced.
• Financial assessment: equipment, building work, licences, maintenance, training and any temporary closures required.
• Time to adapt: a reasonable period to obtain quotations and permits and implement the change.
• Approval threshold: an agreed amount or criterion above which the franchisee’s written consent is required.
• Cumulative changes: a review of the combined cost of several updates, to prevent numerous small requirements from bypassing the threshold.
• Exceptions: a special procedure for urgent measures required by law or needed to protect safety.

Distinguish a legal obligation from a commercial preference. If a change is said to be required by regulation, ask to see the applicable rule and clarify its scope; if it is a brand refresh, ask for the rationale and timetable.

For example, replacing equipment that still works may be reasonable to improve service, but it requires discussion of the timing, compatibility with the premises and who pays for any adaptations. No promise of higher sales should be treated as a guarantee that you will recoup the investment.

4. Keep records and establish a way to raise objections

Before buying, ask for examples of previous updates and their implementation timetables. Ask other franchisees whether they were able to raise technical difficulties and whether they received written responses. The aim is to understand how this process works in practice.

Agree who will receive comments or objections, how long they have to respond and how disagreements will be handled. If you agree that a disputed requirement may be temporarily suspended, make the conditions and exceptions clear: raising an objection does not automatically suspend your obligations.

Keep copies of each version of the manual, notices, quotations and approvals. Also establish which document takes precedence if the contract, its schedules and the manual conflict.

Practical conclusion: before signing, aim to settle three questions: what the franchisor can change, how much it can require you to invest and what procedure allows you to challenge a disproportionate requirement.