Building a franchise: setting clear maintenance responsibilities

In an owner-run business, the owner is often the first to notice a faulty machine. In a growing franchise network, operational safety cannot depend on that personal attention. If you want to turn an established business into a franchise, you should decide early on how equipment will be maintained, faults reported and repairs arranged. What matters is not having the longest checklist, but allocating tasks, costs and responsibility in a workable way.

1. Classify equipment by the consequences of failure

Start by taking stock of your existing business. List all equipment and fixtures whose condition affects safety, service delivery or the customer experience. These might include refrigeration systems, treatment equipment, tools, point-of-sale systems and ventilation. Which items matter will depend on your business model.

For each item, record at least:

• its function and importance to day-to-day operations;
• its owner and, where applicable, the rental or leasing provider;
• the manufacturer's care and maintenance instructions;
• any applicable mandatory inspections;
• the designated contact person and available service documentation;
• what to do if a fault occurs.

Distinguish between three questions: Does the item need routine care? Does it require professional servicing? Is there a statutory inspection requirement? These are not the same tasks. Cleaning is no substitute for a technical inspection, and a maintenance contract does not automatically demonstrate compliance with all legal obligations.

Next, classify the equipment according to the consequences of failure. A damaged decorative feature calls for a different response from a failed refrigeration unit. This classification will help you set priorities for reporting faults, arranging temporary alternatives and carrying out repairs.

2. Put contractual responsibilities on a sound legal footing

Germany has no dedicated franchise act and no general government franchise register. Franchise agreements are governed in particular by the general provisions of the German Civil Code (BGB), including the rules on the scrutiny of standard terms and conditions under sections 305 onwards. Further legislation may apply depending on the contractual arrangements and business activities. The European Code of Ethics for Franchising is a self-regulatory instrument, not legislation.

You must also observe the safety regulations that apply to the equipment concerned. Where a franchisee employs staff and provides them with work equipment, the German Occupational Safety and Health Act (Arbeitsschutzgesetz) and the Ordinance on Industrial Safety and Health (Betriebssicherheitsverordnung) may be particularly relevant. These can give rise to duties relating to risk assessments, maintenance and inspections, for example. Not every piece of equipment is subject to the same requirements, so blanket inspection intervals for all franchise outlets would be inappropriate.

The franchise agreement should allocate the core responsibilities: Who purchases and operates the equipment? Who commissions servicing? Who pays the ongoing costs, and who decides when an item should be replaced? Where premises are rented or equipment is leased, the relevant agreements must also be reviewed. Ownership alone does not settle every question of responsibility.

Important: Allocating tasks internally does not automatically remove statutory obligations. A franchisee might, for example, have maintenance services procured centrally while retaining their own duties as an employer. Seek qualified advice on how the franchise agreement, tenancy agreement, service agreements and legal requirements interact.

3. Turn maintenance requirements into a practical daily process

The legal framework belongs in the contract; the practical arrangements belong in clear operating instructions. For each relevant equipment category, these should explain which checks staff may carry out and when qualified specialists are needed. Safety-critical work must not become an improvised DIY task simply to save money.

A straightforward process has four steps:

1. Set the schedule: Take account of manufacturers' instructions, operating conditions and legally required inspections.
2. Arrange the work: Name a responsible person at the franchise outlet and appoint someone to cover their absence.
3. Document completion: Record the date, scope of work, service provider and any defects identified.
4. Close out defects: Keep a clear record of repairs, any necessary withdrawal from use and authorisation to return the equipment to service.

Use your existing business to test this process under real operating conditions. Can staff find the serial number? Can they reach the service provider? Can records be filed without significant extra work? Details like these determine whether the procedure will actually work in practice.

You will also need a brief emergency action card for breakdowns: What must be stopped immediately, who must be notified, and which temporary alternatives are permitted? Reporting an incident to head office must not delay urgent action needed to protect people or goods.

4. Plan for costs and replacement equipment from the outset

A low purchase price tells you little about an item's running costs. In your existing business, therefore, record maintenance expenditure, replacement wear parts, repairs and downtime separately. This experience will help you explain the financial implications of your equipment requirements to prospective franchisees.

Separate recurring maintenance costs from unplanned repairs and future replacement expenditure. Do not make blanket promises about service life or repair costs without a reliable basis. A warranty will not necessarily cover every fault or all resulting costs either.

Also decide how replacement equipment can be arranged at short notice. If an item fails, may a franchisee use a functionally equivalent alternative? Who checks its suitability, and how quickly will a decision be made? This helps prevent an outlet from grinding to a halt simply because approval is still unresolved.

Practical takeaway: Before your first franchisee opens, draw up an equipment list covering responsibilities, maintenance requirements and a breakdown procedure. Test it in your own business and have the legal allocation of responsibilities reviewed. This will make reliable maintenance a shared strength of your franchise network.