The HGK Franchise Register: What It Means for Franchisors

When turning an existing business into a franchise, it is easy to confuse a register listing with legal confirmation that you are ready to expand. The Croatian Chamber of Economy (HGK) Franchise Register provides a useful overview of opportunities within the franchise community, but it does not replace testing your business concept, protecting your rights or putting a sound agreement in place. For a prospective franchisor, the key is to understand what this overview shows and what you still need to arrange and substantiate yourself.

What the HGK Franchise Register is — and what it is not

HGK created the Franchise Register as a guide for entrepreneurs considering franchising. The published document states that it covers information received up to that point about existing franchises operating in Croatia. This is an important distinction: it is a collection of submitted information, not necessarily a comprehensive list of all available franchises.

Register entries include details such as country of origin, number of outlets, minimum requirements for taking on a franchise and planned expansion areas. This overview helps prospective franchisees make initial comparisons, but does not, on its own, establish whether a particular opportunity suits their experience and available capital.

A listing should not be presented as government authorisation, a guarantee of profitability or confirmation of legal compliance. Equally, a franchise’s absence from a particular edition does not mean it is operating illegally. When using the register, always consider the document’s date and the possibility that terms may have changed since publication.

Separate the register from legal obligations

Croatia has no dedicated law comprehensively regulating franchising. Nor is there a general requirement to register a franchise before entering into a franchise agreement, or a specific statutory franchise disclosure document that must be provided before signing. The HGK Register is therefore not a statutory register of approved franchises.

The relationship between franchisor and franchisee is governed primarily by the Civil Obligations Act, including its rules on entering into and performing contracts, good faith and fair dealing, and liability during negotiations. The absence of a dedicated franchise law does not permit misleading promises or the withholding of material information.

Depending on the nature of the business and the agreement, the Trade Mark Act, the Competition Act and applicable European Union competition rules are also relevant. Sector-specific regulations remain binding regardless of the franchise relationship. Registering a business in the appropriate business register is a separate matter and must not be confused with listing a franchise in the HGK Register.

Any reference to a franchise community’s code of ethics is no substitute for the law either. Franchisors should clearly distinguish between legal obligations, contractual obligations and voluntarily adopted standards of conduct.

Prepare information that can be verified

Before submitting information to HGK, request up-to-date guidance on submission, listing and updates. Do not assume from an existing publication that the procedure, form or requirements remain unchanged. Assign one person within your organisation to confirm the accuracy of all information.

Prepare a working spreadsheet with four columns: information for publication, its meaning, supporting evidence and the date checked. Pay particular attention to the following:

• Franchisor identity: name the legal entity that will enter into agreements, not just the brand.
• Number of outlets: distinguish company-owned outlets from franchised outlets, and trading locations from those that are contracted or planned.
• Premises requirements: explain which requirements are mandatory and which are desirable, and whether they depend on the outlet format.
• Required investment: separate the initial franchise fee from fit-out costs, stock, rent and working capital; state how VAT is treated.
• Expansion areas: specify where you are considering new partners, without implying that territorial exclusivity is already guaranteed.

If you offer different outlet formats, do not reduce them to a single unexplained minimum investment figure. For example, a small-format retail outlet and a full-service outlet may have different premises and funding requirements. Prospective franchisees must be able to understand which format each published requirement applies to.

Keep supporting evidence for every public claim. Records of operating outlets, an up-to-date cost breakdown and documentation of rights to the brand are more useful than a general assertion that the concept is ‘fully ready’.

Establish a process for updates and corrections

Information in the register should be consistent with the offer you send to a prospective franchisee and the documentation they receive during negotiations. Different investment figures or inconsistent outlet numbers create unnecessary doubt, even when the cause is simply an outdated file.

Define the events that trigger a review: a fee change, a new outlet format, a location closure, a change in the contracting legal entity or a change in available territories. Following any such change, check all public descriptions of your franchise offering and request updates wherever you cannot edit the content yourself.

Keep copies of submitted versions and record their submission dates. If a prospective franchisee has received an older edition, explain the differences in writing before they make a decision. Do not assume that subsequently amending one document automatically corrects all information previously sent out.

Practical takeaway: use the register as a verifiable overview of your franchise offering, not as an endorsement of its quality. Before submitting information, ensure it is consistent, document your claims and assign responsibility for keeping it up to date.