Franchises in Guatemala: assess the intermediary

An intermediary can help you find a franchise in Guatemala, arrange meetings and compare proposals. However, someone who introduces you to a brand does not necessarily work for you. The franchise sector includes buyer’s advisers, sales representatives and consultants hired by brands. Before following a recommendation or paying for support, establish that person’s role and the interests that may influence their selection.

1. Identify whom they represent

Ask directly: ‘Who hired you, and who pays you if I buy this franchise?’ The answer helps distinguish a sales introduction from advice tailored to your needs. Receiving a commission from the franchisor does not automatically undermine the service, but it does create an incentive you should know about.

Request a written proposal identifying the person or company responsible, their client and the scope of their involvement. If they claim to represent the franchisor, ask the brand itself to confirm that relationship. Do not assume they can negotiate terms or accept money on its behalf.

It is also worth asking:

• Do they work only with certain brands?
• Can they recommend options that do not pay them a commission?
• Do their incentives vary depending on the franchise chosen?
• Are they paid for introducing candidates, securing a signed agreement or opening an outlet?

The distinction matters: a list of brands they represent may be useful, but it is not an independent comparison of all the available alternatives.

2. Agree on deliverables, not vague promises

Phrases such as ‘comprehensive support’ or ‘the ideal franchise’ say little about the work you are paying for. Ask for specific tasks, delivery dates and acceptance criteria. The service might include an assessment of your profile, a shortlist with reasons for each choice, interview coordination and a documented comparison of financial terms.

Agree on how each recommendation will be justified. A useful selection should match the demands of the business to your experience, availability, investment capacity and intended location. A brand’s popularity alone does not prove that it is right for you.

Distinguish between collecting documents and verifying them. Receiving a sales sheet from the franchisor does not mean checking its figures. Ask what information the intermediary will cross-check, which documents they will use and what limitations their review will have.

Leave legal and accounting assessments to suitably qualified professionals. If the package includes these services, identify who will provide them, whom they will work for and what report you will receive. Avoid paying twice for tasks the franchisor already offers free of charge as part of its sales process.

3. Clarify fees and incentives before paying

The agreement should separate the fees you will pay from any remuneration received from third parties. Ask for disclosure of commissions connected with your transaction and how potential conflicts of interest will be managed. If the intermediary refuses to disclose them, take that limitation into account when assessing their independence.

Pay particular attention to:

• Advance payments: what work they cover and when they are considered earned.
• Success fees: what triggers payment and how the intermediary’s involvement is established.
• Additional expenses: which require your prior approval.
• Exclusivity: whether it restricts your ability to search directly or through other advisers.
• Termination: how to end the engagement and which payment obligations might remain.

Watch out for clauses requiring a commission even if you buy after the relationship has ended. Negotiate a defined time limit and a verifiable record of the brands actually introduced to you. Do not accept an open-ended obligation covering any future purchase.

4. Understand the Guatemalan legal framework

Guatemala has no franchise-specific law or special mandatory pre-contractual disclosure regime for these transactions. A franchise agreement is an atypical commercial contract: the Commercial Code applies, supplemented by the Civil Code. The Industrial Property Law, Decree 57-2000, governs matters such as trade marks and their licensing, but does not replace a review of the business or the agreement.

The intermediary’s engagement also needs to be reviewed in light of its nature and specific obligations. Do not assume that the title ‘franchise consultant’ demonstrates any special official authorisation or guarantees independence. Check their identity, experience and references; any certification they present should be verifiable with the issuing body.

Keep proposals, reports and correspondence. If a recommendation rests on an important claim, ask for its supporting evidence in writing and share it with your independent advisers before deciding.

Practical conclusion: engage an intermediary only when you can explain whom they represent, how much they charge, what they will check and what they will deliver. Their involvement should help you make a decision, not replace your own assessment of the franchise.