QFA publishes guide to pre-contract franchise information

On 4 November 2026, QFA published a guide to pre-contract information for franchises in Croatia, focusing on investment, financial performance and the obligations of future partners. Its central message for Croatia’s franchise community is that a sales presentation is not enough: before signing, prospective franchisees should be able to distinguish proven business performance from estimates and promises.

The guide does not announce new legal obligations

The publication explains Croatia’s existing framework rather than a change in the law. Croatia has neither a dedicated franchising law nor a legally prescribed standard franchise disclosure document. Nor is there a specific statutory deadline for providing such a document to a prospective franchisee before the agreement is signed.

As the guide stresses, this does not mean that a franchisor can withhold material information or make unfounded promises about results. Its recommendations therefore centre on preparing information that enables prospective franchisees to make a sound business decision, rather than relying solely on the appeal of the brand or a sales presentation.

The guide is also aimed at entrepreneurs preparing to take on their first franchisee. Before doing so, they need to distinguish clearly between what has already been tested in the business, what remains an expectation and which responsibilities an independent partner will assume. These distinctions should be evident in the documentation, not merely discussed verbally.

The information pack should show the full investment

QFA recommends providing a separate pre-contract information pack alongside the draft agreement and relevant supporting documents. Its purpose is to show what prospective franchisees will receive and what they are committing to, while offering reasonable protection for trade secrets. This does not require the immediate disclosure of every confidential operating procedure, but enough information should be provided to assess the offer.

The pack should identify the franchisor, its registered office and registration details, as well as the role of any related companies providing key services. It is important to explain how long the concept has been operating, what has been tested in company-owned outlets and whether there is any experience of working with independent franchisees. Prospective franchisees should also be told who owns the trade mark and on what basis its use is permitted.

Particular emphasis is placed on the total initial investment, which is not the same as the initial franchise fee. According to the guide, the breakdown should include equipment, fit-out, stock, deposits and the working capital required, with the assumptions behind the estimate clearly stated.

Ongoing obligations are equally important: fees, mandatory purchasing requirements, technology costs, required insurance and expected future investment. The pack should clarify what support the franchisor actually provides, what it charges extra for and what remains the franchisee’s responsibility. The guide identifies the agreement’s term, renewal, territorial rights, transfer of the business and the consequences of the agreement ending as key contractual issues.

Financial information is not a guarantee of future performance

In its section on finances, the guide calls for a clear distinction between historical results, projections and targets. Each set of figures should be accompanied by an explanation of the data source, the period covered, the type of location and any particular operating circumstances.

Turnover figures should state whether they include VAT, while profit or operating results should explain which costs have been included. Particular attention is given to the owner’s labour, franchise fees, rent at market rates and support costs that a company-owned outlet may not pay separately.

This clarification matters when presenting the results of a company-owned outlet to a prospective franchisee. They need to see which costs underpin the figures, not just the final turnover or profit total. Without these explanations, the results do not reveal all the assumptions relevant to assessing the offer.

For projections, QFA recommends presenting several scenarios, with assumptions about customer numbers, average spend, staffing and costs. Historical results, projections and targets must remain clearly separated, so that an expectation is not presented as an established fact or a guarantee of future performance.

Written answers and updates are part of the preparation

The guide goes beyond the contents of the initial pack. It recommends keeping a record of prospective franchisees’ questions and written answers, and providing updates when material circumstances change during negotiations.

Examples include changes to fees, suppliers of key equipment or the scope of support. Alongside the new information, prospective franchisees should receive an explanation of the impact of the change. Sales presentations and statements by the sales team should also be consistent with the documentation, so that verbal promises do not contradict the agreement.

Practical takeaway: before the first substantive discussion, prepare a dated information pack, verifiable financial information and a process for answering questions in writing. Prospective franchisees should be able to see clearly what is proven, what is an estimate and what risk they are taking on.