Franchise standard terms: which provisions form part of the contract?

When buying a franchise, it is easy to focus on the document with your signature at the end. Yet separate standard terms and conditions, fee schedules and declarations can also shape your actual obligations. For anyone joining a franchise network in Hungary, establishing exactly which documents they are accepting — and what happens if those documents conflict — is therefore a due diligence task in its own right.

1. Identify the standard terms and conditions

Standard terms and conditions, known in Hungarian as ÁSZF, do not necessarily appear in a document bearing that title. Under Act V of 2013 on the Hungarian Civil Code, they are essentially terms drawn up unilaterally in advance by the party using them for use in multiple contracts, and which the parties have not individually negotiated. Individual clauses in the main franchise agreement may therefore also qualify as standard terms.

Hungary has no separate, comprehensive franchise act, but it would be wrong to say that franchising is not directly regulated by civil law. The Civil Code expressly recognises franchise agreements as a distinct type of contract. The general rules on contracts also apply, including those governing the incorporation of standard terms and unfair contract terms.

Start by requesting a complete list of documents. Each entry should state the title, version or date, and whether the document contains contractual obligations. An introductory brochure, a contractual schedule and an information notice issued later do not automatically carry the same legal weight.

Separately identify the provisions you have genuinely negotiated. Filling in a name, address or business location does not, in itself, prove that the entire pre-drafted agreement was individually negotiated.

2. Check access to the terms and any requirement for separate acceptance

Under the Civil Code, standard terms become part of the contract if the party using them has given the other party an opportunity to read them before entering into the contract, and the other party has accepted them. It is therefore not enough simply to check whether the franchisor mentioned the document somewhere.

Ask for the referenced terms in a format you can save. If they are available only on a website that can be updated, keep the version available before signing, together with correspondence recording when it was supplied. To make it easier to establish what was agreed later, it is advisable to attach the accepted version to the contract.

Certain terms must also be specifically brought to your attention. Subject to statutory exceptions, the Civil Code requires separate notification of standard terms that differ substantially from legislation or usual contractual practice, among others. Terms that depart from a previous agreement between the parties are also subject to a specific rule. Such a provision becomes part of the contract only through express acceptance following that separate notification.

Do not sign an inaccurate acknowledgement of receipt. If it states that you have received and read every schedule, but a document is missing, ask for it to be supplied first. A promise that “we will give it to you when you open” is no substitute for checking it before entering into the contract.

3. Resolve inconsistencies and clarify future changes

Prepare a simple comparison table: what does each document say about the same obligation? There is no need to copy every sentence side by side. Start by comparing payment deadlines, the scope of services, liability provisions and methods of notification.

For example, the main agreement might say that a central service is included in the recurring fee, while the standard terms list it as separately chargeable. Do not settle this with verbal reassurance: amend the wording or clearly record the individually agreed departure from the standard terms.

Under the Civil Code, where a standard term conflicts with another contractual term, the latter becomes part of the contract. Even so, establishing a clear order of precedence between documents is useful to avoid disputes over interpretation in day-to-day operations.

The phrase “terms in force from time to time” deserves particular scrutiny. Ask:

• Which provisions can the franchisor change unilaterally?
• What gives the franchisor that right?
• When and how will you be notified of changes?
• What options do you have to challenge a change?

Uploading a new document to a website does not, by itself, make every change binding. The legal basis for unilateral amendments, and the limits on them, must be assessed against the specific contract and the applicable law.

4. Do not rely on consumer protection when contracting as a business

Franchisees usually enter into contracts for business purposes and therefore generally do not act as consumers. You should not assume that you have an automatic consumer right of withdrawal or all the protections applicable to consumer contracts.

This does not leave you without protection. Under the Civil Code, an unfair standard term incorporated into a business-to-business contract can also be challenged. However, a provision does not meet the legal test of unfairness simply because it is costly or unfavourable. Its content, context and the circumstances in which the contract was concluded must be considered together, with the help of a lawyer.

Hungary has no general statutory requirement for a franchise-specific disclosure document or a mandatory fourteen-day waiting period. The Hungarian Franchise Association’s recommendation that the draft agreement be supplied fourteen days in advance is self-regulatory guidance, not a statutory deadline. The Civil Code’s duties to co-operate and provide information apply regardless.

Practical takeaway: only accept a set of documents once you have identified and saved them all and resolved any inconsistencies between them. Before you sign, ask your lawyer to review not just the main agreement but every set of standard terms it refers to.