Buying a franchise: which documents to request before signing

Before joining a franchise network, you need more than a brand presentation and a draft agreement. You need documents showing who is granting you the rights, what you will actually receive and which obligations you are taking on. In Croatia, it is particularly important to organise this due diligence yourself: there is no specific, legally prescribed pre-contractual disclosure package for prospective franchisees. This guide will help you put together a document request before signing or making your first payment.

1. Understand what the law requires and what you need to request

Croatia has no dedicated franchise law. A franchise agreement is an innominate contract, meaning it is not a specifically regulated contract type. It is governed by the Civil Obligations Act, including the rules on contract formation and validity, good faith and fair dealing, and liability for damages. Negotiations do not in themselves create an obligation to enter into a contract, but conduct contrary to good faith and fair dealing may give rise to liability.

Depending on the nature of the relationship, the Companies Act, Trade Mark Act and Competition Act may also be relevant, alongside applicable European Union rules. For example, sales restrictions and resale price fixing do not become lawful simply because they appear in a franchise agreement.

Croatian law does not set a specific deadline by which every franchisor must provide a standardised franchise disclosure document before signing. You should therefore request a reasonable period to review the full documentation. Do not assume that you have an automatic consumer right to withdraw: you are generally buying a franchise for business purposes.

The Franchise Register maintained by the Croatian Chamber of Economy (HGK) is an information resource, not a mandatory regulatory approval scheme for selling franchises. Registration is no substitute for your own due diligence. Likewise, the European Code of Ethics for Franchising is a self-regulatory standard, not Croatian law. If a franchisor refers to it, ask on what basis it applies the code and how complaints are handled.

2. Check who is entitled to offer the brand

The first set of documents should confirm the identity of the contracting party and its right to grant the franchise. A well-known brand name in a presentation is not proof that the company you are negotiating with holds the necessary rights.

Request:

• the contracting party’s full legal name, registered office, identification details and an up-to-date extract from the relevant register;
• confirmation of the signatory’s authority to sign the agreement;
• details of the relevant registered trade marks, their owners, territorial coverage and status;
• evidence of authority to grant rights if the franchisor is not the trade mark owner;
• an explanation of the relationship with the brand owner if you are dealing with a master franchisee or an intermediary.

Cross-check the company details against Croatia’s Court Register, and check trade mark information in the relevant databases of the Croatian State Intellectual Property Office, EUIPO or WIPO, depending on the type of protection.

A specific question for sub-franchises: what happens to your agreement if the master agreement from which the franchisor derives its rights comes to an end? Request a written explanation and an appropriate contractual provision. If the full master agreement cannot be disclosed for confidentiality reasons, a lawyer can request relevant extracts or other verifiable evidence of authority.

3. Request the supporting documents that reveal your actual obligations

A draft agreement often refers to price lists, an operations manual and network rules. If you have not seen them, you do not know the full extent of the obligations you are accepting.

Request all schedules, appendices and documents referred to in the agreement, with a date or version number. The package should cover the fee schedule, mandatory purchasing requirements, the list of approved suppliers, equipment and IT system requirements, and rules on using the brand. For every document that can be changed, check who is entitled to amend it, how you will be notified and who bears any additional costs.

Support should also be documented. Rather than accepting a promise of ‘comprehensive training’, ask for the programme, duration, location, number of people covered and a list of costs payable separately. For support after opening, establish who your contacts will be, which support channels are available and what the franchisor is contractually required to provide.

It is understandable that a franchisor wants to protect its know-how. A confidentiality agreement, supervised access or disclosure of the relevant sections of the manual may provide a solution. However, confidentiality should not conceal obligations that materially affect your business. If you cannot review them before signing, record this as an unresolved risk.

4. Turn answers into a verifiable record

Keep a simple table with four columns: document requested, date received, outstanding question and agreed resolution. After meetings, confirm verbal explanations by email and ask the other party to confirm them explicitly.

Request contact details for existing franchisees who are willing to speak to prospective franchisees. Ask whether the training actually delivered, the availability of support and the process for changing rules match what the documents say. Their experiences are no guarantee, but they may highlight issues that warrant further checks.

Before making any reservation payment, request written terms: who you are paying, what the payment is for, whether it is refundable and what happens if the final agreement is not signed. Do not assume that calling a payment a ‘reservation’ automatically gives you a right to a refund.

Have a lawyer review the final document package. Ensure that key promises about rights and support are included in the agreement or a signed schedule, rather than remaining only in the presentation.

Practical takeaway: do not sign until the franchisor’s authority, all material obligations and the terms of any payment are clear. A missing document is not a minor administrative detail; it is an issue to resolve before joining the franchise network.