Buying a franchise: setting boundaries for changes to the concept

Joining a franchise network means adopting a shared way of working, but that approach will not necessarily stay the same. New services, sales procedures, digital tools or quality requirements can reshape your business. Before buying a franchise, examine how the agreement governs changes to the concept: a seemingly straightforward obligation to comply with standards can have significant implications for how you operate.

1. Identify the documents that set the rules

The agreement does not always contain every operational obligation. It may refer to a manual, technical schedules or procedures available on an online platform. Your first task is to identify these documents and establish their role in the contractual relationship.

Ask for a precise list of the applicable documents, their dates or version numbers, and details of how to access them. If the full manual remains confidential until you join, ask for at least its table of contents and a sufficiently detailed explanation of the requirements that will be crucial to your decision. A confidentiality agreement may help facilitate this review, but does not guarantee full access.

In particular, ask:

• Does the manual simply describe working methods, or does it impose financial obligations too?
• Does the agreement expressly provide for updates to the manual?
• Which document takes precedence if there is a conflict?
• How can you retain evidence of the rules that applied on a particular date?

A broad reference to “current standards” deserves careful scrutiny. You need to understand what you are accepting today and what may change tomorrow.

2. Understand the legal scope of changes

In France, there is no single statutory framework governing every aspect of a franchise agreement. The relationship is subject, in particular, to general contract law and competition law, alongside specific pre-contractual disclosure requirements.

Introduced by the Doubin Law of 31 December 1989, Article L. 330-3 of the French Commercial Code applies where a party makes a trade name, trade mark or trading identity available while requiring exclusivity or near-exclusivity for the business activity. In these circumstances, the pre-contractual disclosure document and draft agreement must be provided at least twenty days before the agreement is signed or any payment is made. Article R. 330-1 specifies the information to be supplied.

This period should also allow you to examine clauses governing changes. It does not amount to approval of their content.

Under Article 1193 of the French Civil Code, an agreement may be amended only by mutual consent of the parties or on grounds permitted by law. However, a clause accepted at the outset may provide for certain changes. Its scope is therefore crucial: updating a procedure covered by the agreement does not necessarily mean that any obligation can be changed at will.

Article 1104 also requires good faith in the negotiation and performance of the agreement. Have an adviser review any wording that gives the franchisor very broad powers without criteria or limits. A clause’s heading alone does not determine its scope.

3. Assess the impact on your operations

Do not focus solely on major changes. A new procedure may take up staff time, increase the time needed to process an order or require training, even if no alterations to the premises are involved.

Ask for dated examples of changes already introduced across the network: an additional service, a revised customer journey, a different management system or new monitoring requirements. For each example, find out how much time franchisees were given, what resources were needed and what difficulties arose.

Then draw up a table with four columns: potential change, operational impact, cost to you, support provided. Distinguish between mandatory and optional changes.

For example, if a new service requires an additional skill, check who will train the team, when this will happen and how you will keep the business running during that preparation. If a digital procedure becomes compulsory, ask what alternatives are available during an outage.

The aim is not to prevent the network from moving forward, but to check that your business can keep pace on realistic terms.

4. Ask for a clearly defined update procedure

A useful clause describes not only the power to change the concept, but also how that power is to be exercised. Suggest specifying:

• the categories of changes covered;
• how written notice will be given and when changes will take effect;
• an implementation period that reflects the scale of the changes;
• the explanations, training and documentation to be provided;
• how substantiated difficulties and any temporary exemptions will be handled.

Also ask how franchisees can submit feedback. Consultation does not automatically confer a right of veto: its role should be explicit.

Have any commitments that are crucial to your decision recorded in the appropriate contractual documents, rather than relying on verbal assurances. Your adviser can distinguish between an authorised update and a change requiring further agreement.

Key takeaway: before signing, identify who can change the rules, within what limits and with how much notice. Then test that procedure against a specific change that could affect your day-to-day operations.