Franchise promises: what should go into the contract?

“We’ll provide ongoing support”, “we’ll bring you customers”, “head office will be there for you” — these are attractive claims when buying a franchise, but on their own they offer little certainty if a dispute arises later. Before joining a franchise network, clarify exactly which promises that influenced your decision the franchisor must fulfil, by when and on what terms. What you need is not more promotional material, but a structured list of commitments.

1. Distinguish between descriptions, forecasts and commitments

Not every positive statement carries the same obligation. A brand presentation may describe how the network operates, a business plan may rest on assumptions, while the provision of a specific service may be a contractual commitment. The first step in your pre-purchase due diligence is to distinguish between them.

Create a table of the statements without which you would not join, or would only join on different terms. For each entry, record:

• what was said, preferably using the original wording;
• who said it, when and through which channel;
• which document supports it;
• what expenditure or decision of your own you are basing on it;
• where it appears in the draft contract.

For example, “central marketing will support your business” does not tell you whether you will receive a local campaign, who will produce the materials or who will pay for the advertising. Do not automatically assume that something other franchisees received in the past is a committed service: it may have been part of a temporary programme or a separate agreement.

Flag the promises that are decisive for your decision. These are the ones whose fulfilment affects your business’s cost structure, working arrangements or risk exposure. Focus first on securing these in the contract, rather than rewriting every general statement in the presentation.

2. Understand the Hungarian legal framework

Hungary has no standalone, comprehensive franchise act, but the relationship is not unregulated. Act V of 2013 on the Civil Code contains specific provisions on franchise agreements. General contract rules also apply, including duties to cooperate and provide information during contract negotiations.

The parties must inform each other of material circumstances affecting the contract. This does not, however, mean that every sales statement automatically becomes a guarantee of a specific outcome. The substance of the statement, the circumstances in which it was made, the evidence available and the wording of the final agreement may all matter.

There is no separately mandated pre-contractual disclosure document with standardised content that applies to all franchisors, nor is there a general statutory waiting period specifically for franchises. The Hungarian Franchise Association’s guideline recommending at least fourteen days to review the contract is an industry recommendation, not an automatic right to withdraw.

Do not therefore assume either that promises outside the contract can never be relied upon or that they will always be enforceable. Important commitments should be clearly incorporated into the agreement. Ask a lawyer to assess the potential legal consequences of misleading information and the requirements for pursuing a claim in your particular case.

3. Turn each promise into a verifiable task

A useful clause need not be lengthy, but it should answer a few basic questions: who must perform it, what must they deliver, by when, on what terms, and how can performance be verified?

Take “personal business development support”. Ask whether this means a designated contact, regular consultations, site visits or written recommendations for action. Specify how often discussions will take place, how they will be arranged and which tasks are included in the standard fee. Separate any support charged at an additional fee from the core commitment.

An important distinction is whether the franchisor commits to an activity or an outcome. Producing a campaign is a verifiable task; securing a specified number of new customers would be a commitment to an outcome. If the franchisor only undertakes to run the campaign, do not plan as though it also guarantees revenue.

Set out your own responsibilities too. Must you provide data, approve materials or allocate a separate budget? Make clear what happens if these steps are delayed. A condition stating that support is available only “subject to adequate cooperation” needs further clarification.

Finally, agree on a procedure for reporting, remedying and documenting shortcomings in performance. Do not assume that a dispute over support automatically entitles you to withhold franchise fees; whether doing so would be lawful must be checked separately.

4. Check that the final wording reflects what was agreed

At the end of negotiations, compare your list of commitments with the contract and its schedules. An agreed request can easily disappear between drafts, particularly if the salesperson and the person preparing the contract are not the same.

Pay particular attention to clauses stating that the written contract constitutes the entire agreement between the parties, or that earlier statements do not form part of it. Have their legal effect reviewed, and do not leave important earlier commitments solely in emails or presentations.

If support is set out in a schedule, make sure its title, version and contractual status are clear. Agree which documents take precedence if there is a conflict. Also check whether the commitment binds the franchisor you are contracting with or refers to a service provided by another business.

Keep dated offers, correspondence and approved versions. After a verbal discussion, send a summary and ask for explicit confirmation; do not automatically treat silence as acceptance.

Practical takeaway: before signing, make sure every decisive promise has a specific contractual reference, a responsible party, conditions for performance and a means of verification. Anything that remains merely reassuring language should be treated as an unresolved negotiating point.