Franchise Pricing Rules in Ireland: Avoid Resale Price Fixing

When you franchise an existing business, setting customer prices stops being a purely internal decision. Your franchisees are independent businesses, not additional company-owned outlets. A pricing policy that worked across your own branches may therefore create competition-law risks when applied to your franchise community. Before granting your first franchise, decide how recommendations, promotions and sales software will preserve genuine pricing freedom.

Understand the Irish competition-law framework

Ireland has no franchise-specific legislation, statutory franchise disclosure regime or requirement to register franchise agreements. That does not leave franchisors free to impose whatever commercial controls they choose. General contract, competition, intellectual property and other applicable laws still govern the relationship.

For customer pricing, the key rules include section 4 of the Competition Act 2002, as amended, and Article 101 of the Treaty on the Functioning of the European Union where trade between EU Member States may be affected.

Commission Regulation (EU) 2022/720, the Vertical Block Exemption Regulation, provides a conditional exemption for certain agreements between businesses at different levels of a supply chain. Fixed or minimum resale pricing is a particularly serious, or ‘hardcore’, restriction under that framework. Including it generally removes the agreement’s benefit of the block exemption; an individual assessment would then be needed.

The practical starting point is straightforward: do not require franchisees to charge a fixed customer price or prevent them from selling below a specified price. Calling a requirement a ‘brand standard’ does not change its substance.

Recommended prices and maximum resale prices can be permissible, provided pressure or incentives do not turn them into fixed or minimum prices. Have an Irish competition-law solicitor assess your policy and agreement together rather than treating a contractual disclaimer as sufficient protection.

Separate price recommendations from enforcement

Begin by reviewing how your existing business sets prices. Identify every instruction, spreadsheet, dashboard and management habit that assumes headquarters has the final say.

A franchise-ready policy should distinguish between:

• Recommended prices: suggested selling prices that franchisees genuinely remain free to depart from.
• Maximum prices: ceilings that leave franchisees free to charge less, subject to legal review of the arrangement.
• Wholesale prices: what you charge franchisees for goods, which must not become a mechanism for enforcing their resale prices.

Explain the commercial reasoning behind recommendations, such as product costs, customer research or positioning. Avoid describing recommended margins as guaranteed or mandatory.

Pressure can be informal. A manager who threatens to delay deliveries until a franchisee restores the recommended price may create the same problem as a written prohibition on discounting. Rebates, marketing support or renewal treatment linked to compliance with a recommended price can also undermine pricing freedom.

Minimum advertised price policies are another warning sign. Restricting the price a franchisee may advertise can amount to indirect resale price maintenance, even if the franchisee is theoretically allowed to sell for less privately.

Train everyone who communicates with franchisees, including field support staff, not just the person drafting the agreement.

Design promotions and sales systems carefully

A shared promotion can help a franchise community present a recognisable offer, but it needs a workable legal and technical structure.

Before announcing a campaign, establish who is selling to the customer, who funds the discount and whether franchisees choose to participate. Do not assume that a short promotional period automatically makes compulsory fixed pricing lawful. Any proposed exception requires specialist assessment.

For each campaign, check:

• Whether customer-facing material clearly identifies participating outlets and relevant conditions.
• Whether franchisees can decline a voluntary campaign without a penalty disguised as an administrative charge.
• Whether recommended promotional prices are genuinely optional.
• Whether online ordering, vouchers and delivery platforms apply the intended pricing arrangements correctly.

Your point-of-sale system deserves particular attention. A clause promising independent pricing is of little use if headquarters locks every price field. Configure suitable permissions and test whether franchisees can change applicable prices without seeking commercial approval.

Central websites and apps can complicate matters. Map the customer transaction before deciding who controls prices; do not assume that processing payment centrally makes the franchisor the seller.

Put a pricing review into your launch process

Prepare a compact pricing pack for legal review: the proposed agreement clauses, pricing policy, sample promotion, software permissions and guidance for support staff. This reveals contradictions that reviewing the agreement alone might miss.

Set a process for handling complaints about another franchisee’s discounts. Staff should not promise to make that franchisee raise its prices. Avoid facilitating agreements between franchisees on future prices or discount limits through meetings or messaging groups.

Review actual behaviour after launch. Check campaign communications and software settings, and correct practices that have drifted away from the approved policy.

Practical takeaway: before offering your first franchise in Ireland, test one ordinary price change and one promotional campaign from start to finish. Ensure that the contract, technology and staff behaviour all preserve the pricing freedom your policy promises.