Franchising in Colombia: how to plan your pace of expansion

Turning an existing business into a franchise is not about selling as many units as demand allows. Each new franchise requires time, coordination and the capacity to respond. To build a sustainable franchise network in Colombia, you need an expansion plan that sets out how many projects you can support at once, in what order and when it makes sense to pause.

1. Calculate your capacity by projects, not enquiries

A list of prospective franchisees does not represent your actual capacity to grow. Before announcing onboarding dates, identify who is involved in each project and how much work they can take on without neglecting the existing business.

Divide the process into stages: candidate assessment, negotiation, fitting out the premises, operational preparation and integration during the first few months. For each stage, record:

• The person with overall responsibility and someone who can stand in for them.
• The estimated time commitment and tasks that require an on-site presence.
• Dependencies on other departments or third parties.
• The number of projects that can be supported at the same time.

Your most constrained resource sets the limit. If several new franchises need the same operations manager at the same time, hiring more sales staff will not resolve that bottleneck.

Set an internal limit on simultaneous projects, separate from your sales target. This limit should reflect your team's confirmed availability and be reviewed when circumstances change. There is no single number that suits every franchise network.

2. Sequence expansion according to geographical complexity

Expanding into several cities at once can multiply travel requirements, coordination time and difficulties in resolving problems. Your geographical priorities should therefore reflect your capacity to provide support, not just candidates' interest.

Compare each location using verifiable criteria: travel time from head office, availability of technical services, ease of operational supervision and the scope to support several units in a single trip. Also consider local differences that require adjustments to how the business operates, without changing its essential elements.

You can classify locations into three internal groups:

• Ready to support now: new franchises can be brought on board using existing resources.
• Ready with preparation: a specific requirement must be addressed before committing to dates.
• Deferred: these require a support structure that is not yet in place.

This classification does not replace market analysis or grant territorial exclusivity. Its purpose is to prevent commitments in locations where head office cannot yet deliver what it promises.

If an attractive opportunity arises in a deferred city, document what would need to change for you to accept it. Do not turn a commercial exception into an operational obligation you cannot sustain.

3. Turn the timetable into clear commitments

Your internal plan should distinguish between a target date, an estimate and a contractual commitment. Confusing these can create expectations and disputes, particularly when a candidate starts incurring costs in the belief that they will be joining the network immediately.

In Colombia, a franchise agreement is an ‘atypical’ contract: there is no comprehensive, franchise-specific regulatory framework setting a mandatory expansion timetable. The general provisions of the Commercial Code and, where applicable, the Civil Code apply, alongside the rules governing the relevant business activity. Good faith must also guide negotiations and contractual performance.

The draft decree published by Colombia's Ministry of Commerce, Industry and Tourism in 2021 should not be confused with legislation in force. On its own, it does not impose a requirement for a franchise disclosure document, known as a Circular de Oferta de Franquicia, or a mandatory period of twenty working days for providing it.

With legal advice, ensure that the commitments you make reflect your actual capacity. Specify which actions fall to each party, which dependencies may affect timings and how delays will be communicated. An internal forecast does not entitle you to unilaterally postpone obligations already agreed.

Avoid advertising immediate availability if all your operational capacity is already committed. A transparent waiting list is preferable to promising dates your team cannot meet.

4. Set criteria for continuing or pausing

Review the plan before accepting each new project. Checking that funding is available is not enough: you must also assess whether previous additions to the network are taking up more attention than expected.

Watch for signs such as overdue tasks, postponed visits, unresolved requests, unplanned travel and responsibilities piling up on one person. Define internally which deviations require changes to the timetable and who has the authority to suspend new additions to the network.

A pause should have an identified cause, a person responsible for addressing it and a verifiable condition for resuming growth. For example, you might reallocate a responsibility and confirm that it no longer causes delays. Temporarily halting recruitment does not remove your commitments to those already in the network.

Practical conclusion: before offering another franchise, confirm that you have operational capacity, a location you can support and a workable timetable. Growing at a pace you can sustain protects both the original business and its future franchisees.