Document management when franchising a business in Colombia

When franchising a business, having documents is not enough: you must be able to demonstrate what was agreed, what was delivered and when it happened. An organised filing system helps you answer enquiries, provide evidence of obligations and avoid relying on scattered emails to piece together the relationship. For a growing franchise network, it is worth designing this system before bringing the first outlet on board.

1. Distinguish business records from franchise registration

In Colombia, a franchise agreement is an ‘atypical’ contract: it has no specific, comprehensive statutory framework. It is governed by the agreed terms and the general rules that apply, particularly the Commercial Code and, where relevant, the Civil Code. Freedom of contract does not remove statutory record-keeping duties or the duty to act in good faith.

Article 19 of the Commercial Code requires traders to retain correspondence and other documents relating to their business in accordance with the law. Article 28 of Law 962 of 2005 sets a general retention period of ten years for traders’ books and records, counted from the last entry, document or supporting record. It permits technical, magnetic or electronic storage methods that guarantee exact reproduction.

Keeping these internal records is not the same as registering a franchise with an authority. There is no general mandatory register of franchise agreements. Nor should internal record-keeping be confused with commercial registration or specific industrial property procedures, such as registering trade mark licences so that they have legal effect against third parties.

The draft decree published by the Ministry of Commerce, Industry and Tourism in 2021 should not be treated as legislation in force: its proposed information circular and twenty-working-day period do not, in themselves, create an enforceable obligation.

2. Create a file for each contractual relationship

Assign an identifier to each franchisee and link it to the outlets they operate. Avoid organising everything solely by outlet name: the same legal entity may manage several sites, change address or change its registered name.

A practical structure could include the following folders:

• Identity and authority to act: the other party’s documents and evidence of the authority of anyone acting on its behalf.
• Contractual documents: the agreement, schedules, amendments and related formal correspondence.
• Deliveries and support: records of materials supplied, training records and support requests handled.
• Account calculations and payments: supporting records for charges, payment records, reconciliations and clarifications.
• Key correspondence: authorisations, formal requests and responses affecting rights or obligations.

Keep general templates separate from the documents actually used with each franchisee. An updated template agreement does not prove which version the other party signed months earlier.

It is also worth maintaining an index showing each document’s date, responsible person, status and location. This helps identify missing items without checking every folder and makes it easier to hand over a complete file when responsibility changes.

3. Keep evidence of delivery, not just files

Saving a manual on a server does not prove that the franchisee received it. Similarly, a training presentation does not establish who attended or which topics were covered.

Define the supporting evidence required for each activity. For document delivery, record the recipient, date, version and acknowledgement of receipt. For training, retain details of participants, topics and evidence that the session took place. For an authorisation, identify who granted it, its scope and any applicable conditions.

Receipt does not mean acceptance. An acknowledgement of receipt may establish that a document arrived, but not necessarily that the other party accepted new obligations. Where agreement is required, use the appropriate contractual mechanism and retain that acceptance separately.

Law 527 of 1999 recognises the legal effect and evidential value of data messages, subject to its conditions. When archiving emails or electronic documents, therefore, take care to preserve their integrity, origin and accessibility. An isolated screenshot may omit important information; also retain the message and its attachments in a retrievable format.

4. Define responsibilities, access and retention

Appoint someone to be responsible for each file and establish who can add, review and consult documents. Sales, operations and accounting teams may contribute information, but someone must check that it is filed correctly.

Set access permissions according to roles and maintain backups. Regularly test that files can be opened and recovered: having a backup that nobody knows how to restore does not solve the problem.

Your retention schedule should take account of the general commercial rule and any specific tax, employment or other requirements that apply. If a dispute arises, seek advice before deleting potentially relevant documents. Where a file contains personal data, incorporate the security and data-processing obligations under Law 1581 of 2012.

Practical action: create a trial file using an actual franchise relationship and ask someone else to locate an agreement, a delivery record and a payment record. If they cannot clearly establish what happened from those records, refine the filing system before expanding your franchise network.