Franchising in Colombia: Association Membership and Codes of Conduct

When preparing a Colombian business for franchising, you may be invited to join an association or adopt a code of conduct. Taking part in the franchising community can help you learn and build professional relationships, but it does not replace business preparation or compliance with legal obligations. Before paying a membership fee or announcing an affiliation, it is worth understanding what membership demonstrates, what it requires and what commitments it entails.

1. Distinguish between membership, registration and authorisation

Membership of a private association is not state authorisation to franchise. Its entry requirements reflect its constitution and internal procedures; they should not be presented as legal conditions applying to every business offering franchises in Colombia.

Under Colombian law, a franchise agreement is an atypical contract: there is no comprehensive, specific legal framework governing all its terms. It is governed by the parties’ agreement, within legal limits, and by the general provisions on obligations and contracts in the Commercial Code and Civil Code. Good faith must guide both negotiations and performance of the agreement.

Other relevant legislation includes Law 256 of 1996 on unfair competition and Andean Community Decision 486 on industrial property. Law 1480 of 2011 protects consumers in the relevant consumer relationships; it does not automatically make a franchisee a consumer in relation to the franchisor.

There is no general requirement to register franchise agreements with Colombia’s Superintendency of Industry and Commerce. This is separate from commercial registration and the registration of trade mark licences: Article 162 of Decision 486 provides for the latter so that a licence has legal effect against third parties.

Nor should a regulatory proposal be confused with an obligation currently in force. The draft published by Colombia’s Ministry of Commerce, Industry and Tourism (MinCIT) in 2021 envisaged a Franchise Offering Circular and a period of twenty working days. Publication as a draft does not make those provisions legal requirements.

2. Examine what the code of conduct entails

An association’s code may set standards for transparency, dealings with prospective franchisees, franchisee support or the handling of disagreements. Its usefulness depends on the obligations being clear and on there being a procedure for enforcing them.

Before signing up, request the current version and review:

• Who is bound: establish whether it binds only the member company or also covers the conduct of its representatives.
• Specific duties: identify the documents, communications or practices you will need to maintain.
• Oversight: ask who receives complaints and how the facts are assessed.
• Consequences: check whether there are warnings, suspension, expulsion or other internal measures.
• Amendments: check how changes are communicated and what options members have.

A private code is not law and does not override mandatory legal rules. However, it can create commitments within the association and, if incorporated into the franchise agreement, contractual obligations. Avoid making a blanket promise to comply with any future version without assessing its scope.

3. Prepare your membership application documents

Membership applications may require information about the company, its tax status, trade marks and franchise model. For example, the membership documents listed for COLFRANQUICIAS include a certificate of legal existence and representation, the Colombian tax registration document (RUT) and evidence of trade mark protection. Always confirm requirements directly with the organisation, as they may change.

Organise your documents into three groups:

• Identity and authority: documents relating to the company and the person submitting the application.
• Rights held: evidence of ownership of, or permission to use, the brand names and other distinctive signs used by the business.
• Operational capability: a description of the business, its premises, support structure and services offered to franchisees.

Appoint someone to check that the information reflects the actual position. If an activity is still being developed, say so: intending to offer support is not the same as having it available.

Before providing complete manuals, contracts or commercially sensitive financial information, ask who will have access, how it will be used and what confidentiality measures apply. Provide documentation proportionate to the purpose of the assessment.

4. Assess the benefits and avoid overstating membership

Compare the fee and time commitment with verifiable benefits: training, networking opportunities, guidance or internal support mechanisms. Ask which are included and which cost extra. Do not assume that joining guarantees prospective franchisees, funding or commercial results.

Also review the rules for using the association’s name and membership badge or logo. Distinguish clearly between applying for membership, being admitted and holding a specific certification, if one exists. These are different statuses.

In sales presentations, describe the actual scope of membership. Avoid claims such as ‘state-authorised franchise’ or ‘guaranteed profitability’ based on membership of a private association. If membership ends, remove its badges or logos in accordance with the agreed terms.

Practical conclusion: before joining, obtain the association’s constitution, current code, fee schedule and rules for using its membership badge or logo. Base your decision on verifiable commitments and benefits, not on the appearance of an authorisation that membership does not provide.