Franchises in Colombia: what information to request before signing

Buying a franchise means turning a sales pitch into information you can review and keep. A well-organised pre-contractual information pack helps you understand what you are buying and what still needs clarification. This guide explains how to request one in Colombia, the significance of the documents provided, and why you should not confuse good practice with a specific legal obligation.

1. Understand what Colombian law actually requires

In Colombia, a franchise agreement is an atypical contract: there is no comprehensive, franchise-specific legislation setting out its content and a mandatory disclosure procedure equivalent to those found in other countries. It is governed by the terms agreed between the parties, subject to mandatory legal rules and the applicable general provisions of the Commercial Code and Civil Code.

This does not mean negotiations lack legal protection. Article 863 of the Commercial Code requires parties to act in good faith and without fault during the pre-contractual period, and provides for compensation for losses caused by a breach of that duty. However, incomplete information does not automatically give rise to compensation: the circumstances and the requirements for establishing liability must be assessed.

Three common misconceptions are worth clearing up:

• The draft published by Colombia’s Ministry of Commerce, Industry and Tourism (MinCIT) in 2021 should not be presented as legislation in force. Its proposal for a Franchise Offering Circular to be supplied twenty working days in advance does not, in itself, establish a current legal obligation.
• Law 1429 of 2010 concerns business formalisation and job creation; it is not a law specifically governing franchise agreements.
• Technical standards and trade association codes of ethics are not equivalent to disclosure laws binding on the entire franchise sector. Their scope depends on whether they have been adopted, the relevant association membership and the terms agreed.

Nor is there a general requirement to register franchise offers or agreements simply because they are franchise arrangements. This is separate from any applicable commercial registration requirements and industrial property formalities.

2. Request an information pack, not just a brochure

Although there is no single statutory form, you can request an organised set of documents. Frame this as a request to help you assess the transaction, without suggesting that every document is a mandatory legal requirement.

Organise the pack into four sections:

• What you are buying: the format offered, the activities covered, any requirements for your personal involvement, and how responsibilities are divided between the parties.
• Agreement documents: the full draft agreement, schedules and a list of documents incorporated by reference. Identify which ones you will be able to review before making a binding commitment.
• Operational information: the stages involved in opening, the permits required for the activity and location, who is responsible for obtaining them, and the conditions that must be met before trading can begin.
• Network background: a list of company-owned and franchised outlets, available contacts, and an explanation of significant differences between formats.

Ask for each file to state its date, version and scope. A document prepared for another country or a different format may be a useful reference, but it does not necessarily describe the Colombian offer you will receive.

3. Keep a record of questions and answers

The usefulness of the information pack depends on being able to link each query to a verifiable answer. Create a simple table with five columns: topic, document received, outstanding question, person responsible for answering, and review status.

For example, if the presentation says the business is ready to operate, ask which authorisations the buyer must obtain and which the franchisor will arrange. Request an answer that identifies tasks and responsibilities, rather than simply repeating the sales claim.

After a meeting, send a written summary and ask for confirmation or corrections. Keep emails, presentations and versions of the agreement in a folder with dates. Keeping information does not turn every promise into a contractual term, but it makes it easier to spot inconsistencies and document how negotiations developed.

If anything changes, request an updated version and an explanation of the change. Do not replace old documents without retaining copies: you need to distinguish a clarification from a material change to the offer.

4. Resolve discrepancies before deciding

Before signing, compare the information pack with the final agreement. Mark each important point as confirmed, amended, excluded or outstanding. Promises that are decisive in your decision should be expressly included in the agreement or in clearly identified schedules accepted by both parties.

Seek legal advice on clauses stating that you have received all information or that the agreement supersedes earlier discussions. Do not sign acknowledgements of receipt for documents you have not received, or statements of understanding that do not reflect the review you have actually carried out.

Agree on sufficient time to examine the final version. That timeframe will be a negotiated condition, not a special statutory cooling-off period you should assume applies.

Practical conclusion: request a dated information pack, record the answers and resolve inconsistencies before signing. An informed decision starts with knowing what is documented and what remains a sales claim.