Buying a franchise: agree who is responsible for local marketing

A franchise network gives you an established brand identity and shared marketing materials. But these alone do not determine who checks whether a local offer complies with the law, responds to a customer complaint or corrects a misleading online advert. Before buying a franchise, establish which marketing activities you can handle yourself and what you remain responsible for even when the materials come from the franchisor. A clear division of responsibilities protects both your business’s finances and the network’s shared reputation.

1. Establish who creates and approves local adverts

Alongside the franchise agreement, ask to see the marketing guidelines and the approval procedure for local campaigns. A general contractual obligation to follow the network’s brand guidelines does not tell you whether you can publish your own offer, use a local photographer or pay for promotion at a nearby event.

List the channels you intend to use: your outlet’s website, social media accounts, search advertising, customer messages, outdoor advertising and printed leaflets. For each, record who creates, approves and publishes the material, and who is responsible for correcting it. Also establish who provides cover when time is short or someone is on holiday.

Ask the franchisor for written answers to at least these questions:

• Which materials can be published unchanged without separate approval?
• Which local changes require fresh approval?
• How quickly will the franchisor process an approval request?
• Who checks prices, offer dates, availability and the advert’s other terms?
• Who can stop an incorrect campaign, including in the evenings or at weekends?

Do not treat a lack of response as approval unless this procedure has been expressly agreed. Keep a record of the approval alongside the final material. Otherwise, it may later be unclear whether the franchisor approved the version actually published or an earlier draft.

Test the procedure with a practical example: you want to advertise your opening in a local newspaper whose copy deadline is next week. Who supplies the images, checks the offer and authorises publication? A concrete exercise reveals gaps in responsibilities more effectively than a general promise of marketing support.

2. Understand the legal responsibilities in Finland

Finland has no specific franchising legislation, statutory franchise disclosure form or franchise agreement registration system. The contractual relationship is governed by general legislation, including the Contracts Act and the Unfair Business Practices Act. The Competition Act and the Trademarks Act may also affect marketing terms and practices.

Information provided before the agreement is signed must not be misleading. This also applies to the franchisor’s descriptions of how comprehensively it handles marketing on your behalf. Ask for the division of responsibilities promised during sales discussions to be included in the agreement or a schedule to it. The Finnish Franchising Association’s code of ethics is self-regulation, not law; check separately whether the franchisor has committed to following it.

When your business markets to consumers, the key legislation is the Consumer Protection Act, particularly Chapter 2, which covers marketing and practices in customer relationships. Marketing must not contain false or misleading information or omit material information. For business-to-business marketing, relevant legislation includes the Unfair Business Practices Act.

Approval from the franchisor does not automatically release your own business from liability. Factors affecting liability include whose name the marketing is carried out under and who sells the goods or services. The franchisor may also bear liability. An agreement between the parties on sharing costs does not override customers’ statutory rights or the powers of the authorities.

3. Check that you can deliver on campaign promises

Customers may see a national campaign as a single, unified promotion, even though a local franchisee fulfils the offer. Before buying, establish how you will be notified of upcoming campaigns and how customers will be told whether your outlet is participating. The advert and the information given at the till must be consistent.

Review one of the network’s previous campaigns. Check how it sets out the offer period, participating outlets, any quantity limits and other material terms. Also establish what happens if an advertised product is unavailable or there are not enough appointment slots. Do not assume that a brief availability disclaimer solves every problem.

If you sell goods to consumers, price reduction announcements are subject to the Consumer Protection Act’s rule on stating the previous lowest price. As a general rule, you must state the lowest price at which the goods were marketed during the 30 days before the reduction. There are exceptions, and the rule should not be applied mechanically to all services or types of promotion. Make sure your system can provide the pricing information relevant to your own sales.

Also check the evidence behind the network’s quality, origin and environmental claims. If a local advert claims, for example, that a product is environmentally friendly, ask for specific evidence supporting the claim and guidance on how it may be used. A ready-made visual template does not, in itself, prove that a claim is true.

4. Put error correction and cost sharing in writing

Marketing responsibilities can easily remain unclear if the agreement covers only permission to publish. Also agree who investigates errors, decides on corrections, communicates with customers and pays for remedial action. Distinguish between using incorrect material supplied by the franchisor and a franchisee changing approved wording without authorisation.

Ask for a practical procedure to be included in the agreement or a schedule: named contacts, how to report problems, the right to suspend a campaign, and a process for handling costs and any compensation claims. In particular, have a specialist review any clause that transfers all marketing liability to the franchisee, regardless of who prepared the material or instructed that it be published.

Include staff time in your local marketing budget. Checking copy, obtaining approvals, handling customer feedback and updating campaigns all take resources, even if images and advertising templates are included in the franchisor’s services. Ask existing franchisees how the approval and error-correction procedures have worked in practice.

Practical checklist: before signing, work through one planned local campaign on paper from start to finish. If it is unclear who creates, approves or delivers it, or who pays for corrections, clarify the division of responsibilities in writing before committing.