Professional qualifications in franchising: who can do the work?

A successful business often relies on the owner's expertise, which cannot be passed on through an operations manual alone. If you want to expand an existing business through a franchise network in Croatia, check whether any activities require specific qualifications by law. The key question is not simply whether a partner can learn your way of working, but who will lawfully carry out the specialist work in their business — and what happens when that person leaves.

Separate brand know-how from legally required qualifications

A franchisor can pass on working procedures, service standards and experience in organising the business. However, a certificate confirming completion of internal training does not, in itself, replace a legally required professional qualification. This distinction must be clear before a candidate invests in premises, equipment or a franchise fee.

Croatia's Crafts Act sets specific qualification requirements for regulated trades, known locally as vezani obrti, depending on the trade concerned. These may include a vocational competence examination, an appropriate secondary school qualification or a master craftsman examination. Certain occupations may also be subject to specific health requirements under separate regulations.

A person wishing to carry on a regulated trade who does not hold the required qualifications may do so if they employ a full-time worker to perform that work who meets the prescribed requirements. This is not the same as occasionally engaging an external adviser or relying on telephone support from the franchisor.

For your own concept, draw up a list of services and activities, and record the following for each:

• whether it requires a prescribed qualification or another requirement that an individual must meet;
• who currently meets that requirement in your business;
• which document provides evidence of compliance;
• how the franchisee will secure a suitable person.

Do not assume that the rules governing Croatian craft businesses (obrti) apply in the same way to every legal structure. Check the precise legal basis for your planned activity and business model.

Check whether an outlet can operate without your qualifications

The owner of an existing business often manages sales, supervises delivery and personally carries out specialist work. A financially successful outlet therefore does not, on its own, demonstrate that another entrepreneur can achieve the same result with a different team.

Before offering a franchise, separate out the owner's roles. Identify those that require formal qualifications and those for which internal training is sufficient. Then check the availability of suitable workers in the area where you want to expand the franchise network. Do not present recruitment as a certainty unless you have checked its feasibility.

Include the cost of employing a person who meets the requirements, inducting them into your system and arranging cover in the outlet's financial plan. If the business depends on one person whose skills are difficult to find, that is a constraint on expansion, not merely a staffing detail.

The distinction between an independent franchisee and a separate operating unit of the same craft business also matters. Under the Crafts Act, a manager must be appointed for every separate operating unit of an unregulated trade (slobodni obrt). The manager of a separate operating unit of a regulated trade must also meet the prescribed qualification requirements. A franchise outlet run by another entrepreneur does not become your separate operating unit simply because it uses the same brand.

Use the contract to define evidence and responsibility, not to replace legal requirements

Croatia has no dedicated franchise law or specific statutory system of mandatory pre-contractual disclosure for franchises. Contractual relationships are governed by the Civil Obligations Act, while the Competition Act and applicable European Union rules are also relevant. Qualification requirements arise from the Crafts Act and activity-specific regulations, and employment relationships are governed by the Labour Act.

A franchise agreement cannot remove these requirements or allow every partner to rely on the franchisor's qualifications. It can, however, clearly allocate responsibilities for checks and notifications.

The agreement should require the franchisee to have suitable people in place and provide appropriate evidence that the requirements are met before the relevant activities begin. Define which changes they must report, to whom, and what happens if a requirement is no longer met. Handle supporting evidence in accordance with data protection rules; there is no need to collect employees' entire personnel files indiscriminately.

Explain the difference between legally required qualifications and your training during discussions with the candidate. Clearly state which training you provide and which prerequisites they must satisfy themselves.

Prepare a procedure for the departure of a key employee

A business continuity plan must go beyond saying that the partner will find a replacement. Your operating instructions should include a procedure for termination of employment, extended absence or any other event that could affect compliance with the requirements.

The franchisee should immediately check how the change affects their ability to operate lawfully, notify the responsible person at the franchisor and establish which activities may continue. If a requirement for a particular activity is no longer met, do not assume that a grace period is available. Check the proposed solution against the specific regulation, consulting the competent authority and a legal adviser where necessary.

The franchisor can help find candidates and speed up internal training for a replacement, but must not promise that its support can substitute for a legal requirement.

Practical conclusion: before expanding, map out the qualifications required, the people who hold them and potential replacements. Sustainable growth of a franchise network requires an outlet that does not depend on a qualification held by the founder but not by the partner.