How to protect your know-how when franchising in Colombia

Turning a Colombian business into a franchise means sharing the knowledge needed to replicate it, but not handing over all its information indiscriminately. Recipes, technical parameters and commercial methods can lose value if they circulate without controls. To build a strong franchise network, the aim is to transfer useful knowledge under clear rules: what is shared, who can access it and how you can demonstrate that it is protected.

1. Identify what qualifies as a trade secret

Not everything your business knows is legally secret. Decision 486 of the Andean Community, which applies in Colombia, protects information as a trade secret if it meets three conditions: it is not generally known or readily accessible to people who handle that type of information, it has commercial value because it is secret, and reasonable measures are in place to keep it confidential.

A recipe published on social media does not become secret simply because it is later included in a contract. By contrast, a combination of production parameters, timings and internal controls could meet those conditions if it genuinely remains confidential.

Before offering the franchise, prepare an inventory with four fields:

• Information: describe the specific knowledge, rather than grouping everything under ‘know-how’.
• Value: explain the advantage it provides and what would happen if a competitor obtained it.
• Current access: identify the employees, contractors and suppliers who know it.
• Existing protection: record access permissions, confidentiality commitments and technical controls.

Classify each item as public, internal or confidential. This classification is a management tool, not a declaration that creates legal protection by itself. If anyone can download a file without identifying themselves, labelling it ‘confidential’ will not be enough.

2. Apply Colombia’s legal framework without inventing formal requirements

In Colombia, franchise agreements are not governed by a dedicated, comprehensive franchise law. They are subject to the general rules of the Commercial Code and, where applicable, the Civil Code, as well as relevant rules on intellectual property, competition and other matters.

Two particularly relevant instruments for protecting confidential knowledge are Decision 486 of the Andean Community, which governs trade secrets, and Law 256 of 1996, whose Article 16 treats the violation of trade secrets as an act of unfair competition. Protection depends on the circumstances and the evidence; simply claiming that someone copied the business is not enough.

Unlike a trade mark, a trade secret is not registered with Colombia’s Superintendence of Industry and Commerce. Its protection requires the legal conditions of secrecy, commercial value and reasonable protective measures to remain satisfied.

Nor should a regulatory proposal be confused with an obligation currently in force. The document published in 2021 by Colombia’s Ministry of Commerce, Industry and Tourism (MinCIT), which proposed a Franchise Offering Circular and a twenty-working-day advance disclosure period, was a draft. Its appearance on an official website does not make it an enforceable rule. There is no specific general franchise disclosure obligation with that deadline, although general duties of good faith do apply.

3. Share information gradually and keep a record

Sharing everything with every interested party increases risk; withholding essential information prevents people from properly assessing and operating the business. The solution is to define access levels according to the stage of the process and each person’s role.

During initial discussions, provide enough information to explain the model without revealing its sensitive elements. When confidential information needs to be examined, first formally agree the purpose of disclosure and the confidentiality obligations. Once the franchise agreement has been signed, provide the knowledge needed to operate, with appropriate permissions for each user.

For example, a food business might allow its production manager to view a confidential formula, while checkout staff can access only sales instructions. This separation must not prevent the franchisee from fulfilling its obligations.

Use individual accounts, control downloads where feasible and retain records of information supplied and accessed. Avoid open repositories and shared passwords. Also appoint someone to update permissions when roles change or a team member leaves.

4. Turn confidentiality into enforceable obligations

The confidentiality agreement and franchise agreement should be consistent. With legal advice, define:

• What information is protected and how it is identified.
• Which activities it may be used for.
• Who may receive it and what commitments they must make.
• Which exceptions apply, such as public information or legally required disclosures.
• How incidents are reported and evidence is preserved.
• How information is returned, deleted or retained for justified reasons when access ends.

The duration of confidentiality obligations should reflect the nature of the information and its legal protection. Do not automatically equate confidentiality with a blanket prohibition on competing. Any contractual penalty clause requires legal review and is no substitute for day-to-day controls.

Run through an incident scenario too: if a formula appears in an email sent by mistake, who restricts access, preserves the records and seeks advice?

In practice: before sharing your most valuable knowledge, complete the inventory, refine the agreements and test the permissions. Trust within a franchise network grows when sharing and protecting information go hand in hand.