Managing Franchise Prospectus Versions Before Signing

Preparing a prospectus is not simply a matter of gathering documents for registration. When a business starts offering franchises, fees, outlet lists and support packages can change during negotiations. Without version control, prospective franchisees may make decisions based on information that no longer matches the contract. In the franchise sector, orderly documentation helps build trust before the relationship begins.

1. Establish the legal requirements before organising the documents

The main reference for franchising in Indonesia is Government Regulation No. 35 of 2024 on Franchising, which replaced Government Regulation No. 42 of 2007. Do not rely solely on older guidance simply because it is still widely available.

Government Regulation No. 35 of 2024 requires franchisors to provide a Franchise Offering Prospectus to prospective franchisees at least 14 calendar days before the agreement is signed. This is time for reviewing the information, not merely a formality involving sending files shortly before signing.

Franchisors must also hold a Franchise Registration Certificate, known locally as an STPW, before entering into a franchise agreement. Their application must include supporting prospectus documentation. Franchisees, meanwhile, apply for an STPW with the franchise agreement attached. Evidence that a prospectus has been provided to a prospective franchisee therefore does not replace the registration requirement.

Clearly distinguish these legal obligations from the document-control procedures recommended in this guide. Version numbers, change logs and acknowledgement-of-receipt forms are internal tools that help demonstrate an orderly process, not additional requirements specified in the regulation.

2. Create a traceable master document

Appoint one person to take responsibility for the prospectus. The marketing team may propose changes, but must not alter documents sent to prospective franchisees without approval. Keep the master document in a storage location with restricted access.

Government Regulation No. 35 of 2024 requires the prospectus to contain, at a minimum:

• The franchisor’s identification details.
• Evidence of the franchisor’s legal business status.
• The history of the business.
• The organisational structure.
• The business system.
• Financial statements for the last two years.
• The number of franchise outlets or business premises.
• A list of franchisees or sub-franchisees.
• Intellectual property certificates or recordal documents.

For each section, record the information source, the person or team responsible for the data, and the date it was checked. Outlet data should come from operational records; financial statements from the finance team; and brand information from the relevant intellectual property documents.

In addition to this minimum content, explain the fees and support offered consistently with the draft agreement. If you use appendices, give them version identifiers so that old appendices are not mixed with a new prospectus. Do not present sales forecasts as though they were actual trading results.

3. Record receipt, not just dispatch

Give every approved prospectus a version code and an issue date. Use a file format that recipients cannot easily alter, then archive an exact copy of the file provided.

Create a delivery register with the following fields:

• The prospective franchisee’s name and the business entity they represent.
• The version code of the prospectus and its appendices.
• The date and method of delivery.
• Evidence of receipt or confirmation of access.
• The planned signing date.
• The name of the person carrying out the final check.

Do not rely on storage links whose contents can be overwritten without a version history. If you use an online data room, retain archived versions and access logs. Confirming receipt also helps identify corrupted files, missing appendices or documents sent to the wrong address.

Schedule signing at least 14 calendar days after the prospectus is provided. Allow extra time for questions and checks, rather than treating the minimum period as a sales target. An acknowledgement of receipt is not a declaration that the prospective franchisee guarantees the accuracy of all the information or waives their rights.

4. Manage changes without hiding the differences

Suppose you change the basis for calculating royalties or reduce outlet-opening support after providing the prospectus. Do not simply replace pages in the old file. Issue a new version and a summary of changes explaining the affected sections and their implications for the prospective franchisee.

Separate administrative corrections, such as a typo in an address, from material changes that could affect the investment decision. Record the reason for each change, who approved it and which prospective franchisees need to receive the update.

As an internal precaution, allow a fresh review period of at least 14 calendar days before signing when material changes are made. This is a risk-management recommendation, not a claim that Government Regulation No. 35 of 2024 explicitly requires the period to restart for every revision. Ask a legal adviser to assess how the changes affect the prospectus, registration and signing timetable.

Answers to prospective franchisees’ questions should also be archived. If an answer changes the substance of the offer, incorporate that change into the official documents; do not leave it recorded only in exchanges with sales staff.

5. Check the prospectus against the final agreement

Before signing, compare the prospectus received by the prospective franchisee with the final draft agreement. Check the parties’ details, fees, territory, term, use of the brand, support and termination provisions. The wording and structure do not have to be identical throughout, but promises must not contradict one another.

Postpone signing if the document versions are unclear, evidence of delivery is unavailable or important changes have not been explained. Once the process is complete, archive the prospectus, appendices, acknowledgement of receipt, questions and answers, and agreement together in a single franchisee file with controlled access.

Practical step: before engaging with your next prospective franchisee, prepare a master document, a delivery register and a change form. These three simple tools help ensure that the information the prospective franchisee reviews remains consistent with the agreement they sign.