Franchising: managing the promises you make to prospective franchisees

Turning an existing business into a franchise means inspiring other entrepreneurs to join your network. But an enthusiastic phrase in a brochure can create expectations your organisation cannot meet. Before you start recruiting, put controls in place for your sales communications: every commitment presented to a prospective franchisee must be accurate, explainable and consistent with the contractual documents.

1. Identify promises that could commit you

Commitments are not confined to the contract. A sales presentation, an email, a visit to the pilot outlet or a verbal response can influence a prospective franchisee’s decision. Start by taking stock of the materials used by the business owner, employees and any recruitment intermediaries.

Pay particular attention to claims about:

• the time needed to open and establish stable operations;
• support with finding premises or securing finance;
• the availability of support teams;
• access to suppliers, tools or commercial terms;
• how easy the business is to run and the franchisee’s workload.

A phrase such as ‘we take care of your opening’ is too vague. Does it mean help with paperwork, on-site support or full coordination of everyone involved? Replace it with a precise description of the services, their limits and the steps that remain the franchisee’s responsibility.

The key test: could you demonstrate today that your organisation can deliver on this promise? If the answer still depends on hiring someone or securing a service provider, describe it as a plan, not an established service.

2. Understand France’s disclosure framework

In France, franchise agreements are governed primarily by general contract law and competition law. However, there is also a specific statutory framework for pre-contractual disclosure, introduced by the Act of 31 December 1989, known as the Doubin Law.

Article L. 330-3 of the French Commercial Code applies where a trade name, trade mark or trading sign is made available alongside an exclusive or near-exclusive commitment in relation to the business activity. Where these conditions are met, the pre-contractual disclosure document, known in French as the DIP, and the draft agreement must be provided at least twenty days before the agreement is signed or, where applicable, before any payment required in advance. Article R. 330-1 specifies what the DIP must contain.

This framework does not make other communications legally irrelevant. Article 1112-1 of the French Civil Code also requires disclosure of certain information that is decisive to the other party’s consent, where that party is legitimately unaware of it or relies on the person they are dealing with. Negotiations must be conducted in good faith.

Misleading communications or deliberate concealment can therefore give rise to a dispute, even if a DIP has been supplied. Depending on the circumstances and whether the relevant legal requirements are met, the franchisor’s liability or the validity of the other party’s consent may be called into question. A general clause stating that a brochure is ‘non-contractual’ does not remove the duty to provide honest and accurate information.

3. Set up a simple approval process for messages

Create a register of sales claims before distributing your first materials. For each claim, record the approved wording, the supporting evidence available, the person responsible for checking it and the review date.

For example, if you advertise support with opening, link that claim to a defined service and resources that are actually available. If you mention negotiated supplier terms, check that future franchisees will genuinely benefit from them and specify any eligibility conditions.

Always distinguish between three categories:

• What already exists: resources that are operational and verifiable.
• What the contract provides for: services you commit to delivering.
• What is still under consideration: developments for which there is no firm commitment at this stage.

Have the brochure, verbal presentation, DIP and draft agreement reviewed together. Descriptions of the same service must be consistent. Then give a designated person authority to approve changes to the materials; avoid individual recruiters keeping their own versions.

4. Keep a record of responses and correct discrepancies

After an important meeting, send the prospective franchisee a summary of the points discussed, particularly any answers tailored to their plans. This helps identify misunderstandings quickly without turning every exchange into a cumbersome formality.

If a question goes beyond the approved commitments, it is better to say you will check than to give a positive answer simply to maintain the prospective franchisee’s interest. This rule should also apply to intermediaries: give them approved materials and a process for referring sensitive questions.

When an error comes to light, clearly communicate the correction to the prospective franchisees concerned. Keep copies of the versions sent and a record of the correction. If it affects information that is decisive to their consent or changes the pre-contractual documents, have its implications for the timetable checked before any agreement is signed or payment collected.

Key takeaway: before recruiting, link every promise to evidence, a responsible person and, where it constitutes a commitment, clear contractual wording. A franchise network is built on firmer foundations with precise expectations than with excessive assurances.