Franchising in Denmark: Avoid Misleading Recruitment Adverts

When you expand your existing business through a franchise network, your first adverts also shape prospective franchisees’ first expectations. Words such as ‘turnkey’, ‘proven’ and ‘attractive earnings’ may sound harmless, but you must be able to explain and substantiate them. Here is a practical way to check your recruitment messages before they appear on your website, in an advert or in a broker’s presentation.

Understand the rules behind your messages

Denmark has no specific franchise legislation, no compulsory franchise registration and no statutory disclosure package that all franchisors must provide before an agreement is signed. This does not mean you have free rein when marketing to prospective franchisees.

The Danish Marketing Practices Act, including its rules on misleading business-to-business marketing, is relevant when you advertise for independent business partners. Claims about factual matters must be supported by evidence. The Danish Contracts Act and general principles of contract law also apply, including duties of good faith and liability during contract negotiations. Depending on the circumstances, incorrect information or failure to disclose material facts may give rise to liability.

Other general legislation, such as the Danish Competition Act, also applies to franchise relationships, but does not replace the need to check the advert itself. The focus here is whether the prospective franchisee receives an accurate picture of the offer.

Franchising is a partnership between independent businesses. Make it clear that you are seeking a franchisee, not offering a salaried job. In particular, avoid presenting projected business profits as the applicant’s guaranteed personal salary.

Review every promise before publishing it

Draw up a list of the specific claims you intend to use in recruitment. Include headlines, images, captions, videos and verbal presentations. The overall impression may go further than any individual sentence.

For each claim, record:

• How would a typical prospective franchisee understand the wording?
• What evidence supports it?
• What qualifications need to appear alongside the claim?
• Who is responsible for checking that it remains accurate?

‘Proven concept’, for example, needs careful consideration if the only experience comes from the owner’s own shop. That is not necessarily the same as a documented track record of operation by independent franchisees. Instead, describe precisely where and how the concept has been used.

‘Turnkey business’ may create an expectation that premises, equipment, systems and the necessary permits are all in place. If the prospective franchisee must find premises or apply for permits themselves, the message must reflect that. Similarly, replace ‘full support’ with specific details of the help you actually offer.

This review is not about making your copy cautious and dull. It makes the benefits clear and reduces the risk of attracting unsuitable applicants on a mistaken basis.

Set clear boundaries around financial examples

Financial claims require particular care because they can easily become decisive in a prospective franchisee’s decision. Distinguish between historical results, budgets and illustrative calculations. These three types of information must not be blurred in your advertising.

If you use results from your own business, you must be able to explain the period covered and the circumstances that make the example relevant. A well-established shop with an existing customer base is not automatically comparable to a new franchisee’s start-up. The owner’s working hours, local rent and special purchasing terms may also affect the picture.

Do not simply put ‘results may vary’ beneath a strong earnings promise. A general disclaimer will not necessarily correct a misleading main message. Material qualifications must be clear wherever the prospective franchisee encounters the claim.

Be equally precise about the cost of joining. If an advert highlights the initial franchise fee, it must not imply that this covers the entire cost of setting up when additional expenditure is required, for example on fitting out premises, stock, a deposit and working capital. State clearly what the advertised amount includes and what must be paid on top.

If a financial claim can only be explained through numerous complicated qualifications, it is often better to leave it out of a short advert and discuss the finances properly at a later stage.

Introduce a single approval process across all channels

Appoint someone to approve recruitment material before publication. Keep approved wording and supporting evidence in one place, and retain a dated copy of the material actually used.

Apply the same checks to external brokers and employees who speak to prospective franchisees. Give them clear guidelines on what they may say about earnings, the work involved and support from the franchisor. An accurate website is of little help if the sales conversation promises something different.

Review the material whenever terms or circumstances change. If you discover a material error, correct the advert and inform affected applicants who may already have relied on the information.

Practical takeaway: Only publish a recruitment promise when you can substantiate it, explain its limitations and deliver it in practice. This gives your franchise network a more credible foundation.