Buying a Franchise: Understanding an Agreement in Another Language

Joining an international franchise network can be appealing, but the agreement may be in English or another language that is not your own. Being able to hold a conversation in a language is not the same as understanding a legal obligation. Before buying a franchise in Denmark, you should therefore establish whether you can genuinely read, assess and comply with the agreement — and what happens if the parties interpret a provision differently.

Danish is not a legal requirement

Denmark has no dedicated franchise law and no franchise-specific legislation requiring a particular disclosure document before signing. Nor is there a special registration scheme for franchise agreements. You should therefore not assume that any authority has checked the agreement’s language or clarity.

Franchise relationships are governed, among other things, by the Danish Contracts Act and general principles of contract law. Depending on the circumstances, legislation such as the Danish Competition Act, Marketing Practices Act and Business Lease Act may also apply. General duties of good faith and rules on liability during contract negotiations may be relevant where information is misleading or withheld, even though there is no specific franchise disclosure law.

There is no general franchise-specific requirement to translate the agreement or voluntarily supplied information into Danish. If you are buying as an independent business owner, you should not assume that consumer protection rules provide any special safeguards concerning language either.

The practical consequence: Ask early on for a version of the agreement you can understand. This is something to clarify and, if necessary, negotiate, rather than a service you can automatically demand. Nor should you assume that a lack of language proficiency will, in itself, release you from the obligations you sign up to.

Identify the full extent of your language needs

Start by asking the franchisor which languages are used in the agreement, its schedules and day-to-day dealings. A presentation in Danish does not necessarily tell you anything about the language of the documents that set out your obligations.

Draw up a simple overview covering:

• The franchise agreement and any personal commitments you will need to sign.
• Schedules covering payments, reporting and operating requirements.
• Manuals and mandatory instructions your business must follow.
• Training, support systems and notifications of changes.
• Formal notices and other communications that may trigger deadlines.

For each item, note the original language, any available translation and who in your business needs to understand the material. This will reveal whether the challenge concerns only the purchase or will continue into day-to-day operations.

Also ask whether you may share the documents with a lawyer and translator under appropriate confidentiality arrangements. Clarify this before passing the material on. If employees will need to follow instructions in another language, you must also plan how to provide explanations they can use. A translated contract alone will not solve that problem.

Distinguish between translation and legal advice

A translation tells you what the text says. A legal review assesses what it means for your rights, risks and options. You may need both.

Terms such as “default”, “indemnity” and “reasonable endeavours” should not simply be replaced with everyday words in your own language. Ask your adviser to explain what action the wording requires, when you could be in breach and what the consequences might be. The meaning depends on the context and the law governing the agreement.

Use this approach for key provisions:

1. Have the wording translated or explained accurately.
2. Relate the obligation to a specific situation in your future business.
3. Ask the franchisor to confirm whether you have understood the situation correctly.
4. Have any unclear wording clarified in the agreement before signing.

Machine translation can help you gain an initial overview, but it should not be the sole basis for your purchase decision. Small differences between words such as “may” and “must” can significantly change an obligation. You should also avoid uploading confidential documents to a public translation service without first checking permission and how the data will be handled.

Obtain a quote for translation and legal review so that you can include the cost in your purchase budget. The quote should also cover checking changes in the final version.

Agree how language will be handled after signing

If there are two language versions, it must be clear whether both are binding and how discrepancies will be resolved. If the Danish text, for example, is only a translation provided for reference, your adviser must also review the version that will actually bind the parties.

You should also agree on a shared working language for important communications. This is particularly important for formal demands, revised instructions and messages with response deadlines. Clarify who will arrange translations, who will pay and when a deadline starts to run. An agreed translation process should leave no doubt about when you need to respond.

Finally, check that the translation matches the final agreement. A carefully prepared translation of an earlier draft can give a false sense of security if the original has since changed.

Practical takeaway: Only sign once you can explain your key obligations in your own words, have had the binding text reviewed and have a clear agreement on the language to be used throughout the ongoing franchise relationship.