Buying a Franchise in Germany: Check Permits Before You Commit

The brand is a good fit, the concept is convincing and an opening date is already being discussed. But are you actually allowed to run the proposed business as planned? An established franchise system can provide guidance, but it does not replace checks by the relevant authorities. Clarifying permits, personal eligibility requirements and responsibilities before you commit helps you avoid taking on obligations for a business that may not yet be allowed to open.

1. Distinguish franchise approval from permission to operate

Germany has no specific franchise act and no franchise-specific state approval or registration requirement for franchise systems. Neither signing a franchise agreement nor joining a franchise network therefore means that the authorities have approved the business model or your particular operation. Membership of a trade association does not replace a legally required permit either.

Franchise agreements are governed primarily by the general provisions of the German Civil Code (BGB), where applicable the Commercial Code (HGB), and competition and antitrust law. Duties to consider the other party’s interests and disclose relevant information already arise during negotiations under sections 311(2) and 241(2) BGB. These do not, however, replace your own checks on the requirements for your proposed activity.

As an independent business operator, you must generally notify the authorities when starting a business with a fixed place of operation under section 14 of the German Trade Regulation Act (Gewerbeordnung). Business registration is not a comprehensive licence to operate. Depending on what you offer, you may need additional permits, registrations or proof of qualifications. The requirements depend on the actual activity, the location and, in some cases, the law of the relevant German federal state.

Do not therefore rely on assurances that other franchisees opened without any problems. What matters is whether your particular proposal is legally permissible.

2. Turn the business concept into a permit checklist

Start by describing exactly what your business will offer. Terms such as “hospitality”, “care” or “services” are too broad for a reliable assessment. Relevant activities might include serving alcohol, preparing food, carrying out skilled trades or providing intermediary services that require a licence.

Then create a checklist with five columns: activity, responsible authority, required documentation, person responsible and progress. Typical areas to check include:

• Restaurants and similar establishments: Whether a licence or notification is required, and in what form, depends on the applicable hospitality legislation. Requirements vary between Germany’s federal states; serving alcohol can be a deciding factor.
• Food: Check business registration requirements and the relevant hygiene rules with the local food safety authority. Certain activities require instruction under section 43 of the German Infection Protection Act (Infektionsschutzgesetz).
• Skilled trades: Ask the local Chamber of Skilled Crafts (Handwerkskammer) whether entry in the Register of Skilled Crafts (Handwerksrolle) and relevant qualifications are required. The work actually carried out is what matters.
• Premises and use: The building control authority can clarify whether the proposed use is permitted or whether approval for a change of use is needed. Fire safety and other requirements may also be relevant.

These examples are not an exhaustive list. Ask the relevant Chamber of Commerce and Industry (IHK) or Chamber of Skilled Crafts for an initial assessment, and have any outstanding points confirmed by the authority responsible. General advice over the telephone is not the same as a binding approval.

3. Check personal credentials and the support available

Some requirements apply not to the business concept but to the operator or the person with professional responsibility. Establish early on who must demonstrate a particular qualification and whether that person will actually be available to fulfil the intended role.

Training provided by the franchise system is not automatically a legally recognised certificate of competence. Nor can you simply use a permit held by another franchisee or the franchisor for your own business. If you are taking over an existing business, check separately which permits remain valid and which must be applied for afresh.

Ask the franchisor for a written overview: which requirements is the system aware of? Which documents will it provide? Who will help with applications and queries from the authorities? Also ask about any known obstacles to obtaining permits for comparable businesses.

Agree specific services rather than vague promises of “support with opening”. These might include supplying technical specifications, hygiene templates or qualification records. The franchisor cannot, however, guarantee decisions by the authorities. Incorrect information about essential requirements may have legal consequences, but it does not automatically give you a right to withdraw from the agreement in every case.

4. Make contractual provision for permit delays

Map out the necessary steps and their timing before signing. Which applications can you already submit? Which require a company to have been formed or specific operational documents to be available? Ask for a realistic explanation of the processing stages, without treating non-binding estimates as a guaranteed opening date.

Discuss suitable contractual safeguards with a specialist lawyer. Options may include making the agreement conditional on obtaining key permits, or expressly agreeing a right to withdraw if they have not been obtained by a specified date. Also define your obligations to cooperate and the consequences of delays you cause yourself.

Clarify when fees become payable, whether opening deadlines can be extended and how services already provided will be charged if the project falls through. Set aside funds in your financial plan for supporting documents, applications and any necessary alterations. Broad cost assumptions based on other locations are not enough.

Practical takeaway: Only sign once the key permit requirements, responsibilities and consequences of delays are clear. A written permit checklist shows what is still missing — and helps prevent approval from a franchisor being mistaken for official permission to operate.