Franchising: organising consultation with franchisees

Turning your business into a franchise means learning a new role: nurturing a community of independent business owners. Decisions can no longer be communicated in the same way as in a business staffed entirely by employees. From the first franchise agreements onwards, structured consultation allows you to draw on operational experience without blurring responsibilities. Here is how to build a simple, useful and legally sound framework.

1. Define what consultation should achieve

Consultation is neither individual support, nor an audit, nor an ongoing renegotiation of the agreement. Its purpose is to identify shared challenges and inform better decisions: whether tools are fit for purpose, whether procedures are understood, what training is needed and which operational problems keep recurring.

Start with a short charter setting out three things: the topics to be discussed collectively, who will participate and how proposals will be handled. Avoid vague statements such as “all decisions will be taken together”, which suggest a level of collective authority you may not wish to grant.

For a new network, a structured meeting with the first franchisees may be enough. A more formal committee becomes useful when informal discussions no longer give everyone an opportunity to share their experience.

The right objective: gather actionable information and explain the reasoning behind decisions, rather than simply holding more meetings. Every issue should lead to a response, a trial or a reasoned decision not to proceed.

2. Establish responsibilities and legal boundaries

In France, there is no general statutory requirement to establish a franchisee advisory committee. How it operates therefore depends on the commitments made by the parties. Franchise agreements are governed, among other things, by general contract law, commercial law and competition law. They must be performed in good faith.

Franchisees remain legally and financially independent. A committee must not become a forum through which the franchisor manages the day-to-day activities of each business’s employees or imposes decisions beyond its contractual powers.

In particular, specify:

• whether opinions are advisory or whether certain matters require consent under the agreement;
• who can authorise a trial and commit to the associated expenditure;
• which information must remain confidential;
• how disagreements and conflicts of interest should be reported.

Compliance with competition law is essential: franchisees must remain free to set their resale prices. Rule out discussions aimed at fixing common prices or coordinating anti-competitive commercial behaviour. Exchanges of sensitive data between independent businesses also require appropriate safeguards.

Finally, if you contractually promise prior consultation, honour that commitment. A committee described as purely advisory cannot change individual contractual rights by a vote.

3. Give operational experience a genuine voice

Do not select only the franchisees who are most available or enthusiastic. Aim for a range of experiences: time in the network, outlet format, trading environment and operational challenges. As the network grows, rotating participants prevents a small group from dominating discussions.

Provide a channel through which those not attending can suggest topics. Ask for a factual description: the problem identified, its consequences, any solutions already tried and the support needed. This turns a general complaint into something practical to work on.

Before each meeting, circulate an agenda and only the documents needed for the discussion. During the meeting, distinguish facts from interpretations. Afterwards, share minutes setting out:

• the issues discussed;
• the proposals accepted or rejected, and the reasons;
• the person responsible for each action;
• the date of the next progress review.

Handle a franchisee’s personal or financial difficulties separately. Collective consultation does not justify disclosing their circumstances to other members.

4. Set realistic expectations from the recruitment stage

When you start franchising your business, do not present a planned committee as an already functioning body. Clearly distinguish what exists, what is planned and what remains to be developed with the first members.

In France, pre-contractual disclosure is governed by Article L. 330-3 of the Commercial Code, introduced by the legislation known as the Doubin Law, and Article R. 330-1. Where the statutory conditions are met—notably where distinctive business identifiers are made available alongside an exclusivity or near-exclusivity commitment—the pre-contractual disclosure document (known in France as the DIP) and draft agreement must be provided at least twenty days before signing or before any required advance payment. Your presentation materials must remain consistent with your contractual commitments on consultation.

After the first few meetings, carry out a simple review: are issues receiving a response? Are promised actions being completed? Do participants understand the reasoning behind decisions? Adjust the process without promising decision-making powers that do not exist.

Key takeaway: before the first committee meeting, prepare a short charter, an agenda and an action tracker. A franchise network benefits more from regular dialogue followed by action than from ambitious governance that exists only on paper.