Franchising in Ireland: Plan Existing Customer Contracts

Franchising an established Irish business means deciding what happens to the customers you already serve. A franchisee’s right to use your brand does not automatically transfer your customer contracts, advance payments or outstanding service obligations. Before offering an existing outlet or customer base, prepare a contract handover plan that separates future sales opportunities from commitments your business has already made.

1. Identify what you have promised customers

Start with a register of live customer commitments, not simply a list of names and contact details. Include subscriptions, maintenance arrangements, repeat-service contracts, deposits, prepaid packages, accepted quotations and unfinished orders.

For each commitment, record:

• The legal entity that contracted with the customer.
• The service or goods still owed and the delivery timetable.
• Money already received and amounts still outstanding.
• Any cancellation, refund, warranty or service-credit obligations.
• Terms dealing with assignment, subcontracting or changes of supplier.
• Whether the arrangement is documented, verbal or spread across correspondence.

Do not assume that a customer belongs to a particular outlet merely because staff there normally handle the work. The contract may be with your existing trading company, including where the customer recognises only the brand.

Separate binding commitments from informal expectations. A history of repeat purchases is not guaranteed future revenue and should not be presented to a prospective franchisee as contracted income.

2. Choose who will deliver each existing contract

There are several possible approaches. Choose deliberately rather than letting the franchisee’s opening date decide matters by default.

Retain and complete the work. Your existing business remains responsible for its contracts, while the franchisee takes new business from an agreed date. This can be straightforward where outstanding orders are short-lived, but customers need clear instructions about whom to contact.

Retain the customer contract and subcontract delivery. The franchisee performs defined work for your business. Check whether the customer terms permit subcontracting, and agree payment, service standards and responsibility for failures. Subcontracting does not, by itself, release your business from its customer obligations.

Arrange a transfer to the franchisee. Ask your solicitor whether assignment, novation or a new customer agreement is appropriate. Assignment may transfer contractual rights, but it does not ordinarily transfer obligations. Replacing one contracting party with another will generally require the agreement of the affected parties through novation or another suitable arrangement.

Do not promise an unconditional transfer of a contract portfolio before checking consent requirements. Build a fallback plan for customers who decline: your existing business may need to complete their work or agree another lawful outcome.

3. Reconcile payments and responsibility

A franchisee can inherit a workload without receiving the money needed to deliver it if deposits and prepayments are overlooked. Prepare a reconciliation for every arrangement that crosses the proposed handover date.

Show what the customer paid, what has already been delivered, what remains due and which business will fund completion. Agree how outstanding invoices, refunds and disputed charges will be handled. Have your accountant check invoicing and tax treatment rather than assuming that an internal payment between businesses resolves everything.

For example, a customer may have prepaid your company for a series of visits. If the franchisee will deliver the remaining visits, document both the delivery responsibility and the commercial payment between you. Also establish who responds if the customer requests a refund.

Keep these arrangements distinct from ordinary franchise fees. The franchise agreement should address the relevant responsibilities, with a separate schedule recording the specific contracts and balances where appropriate. Neither document should imply that allocating costs internally removes a customer’s legal rights.

4. Apply Irish law and communicate the change

The Republic of Ireland has no franchise-specific legislation, mandatory statutory franchise disclosure document or franchise-specific registration system. That does not make customer contract transfers automatic. General contract law governs contractual rights and obligations; applicable consumer protection, data protection, Irish and EU competition, and intellectual property laws also remain relevant.

For consumer customers, consider the Consumer Rights Act 2022 where applicable. A franchise handover must not be used to sidestep statutory remedies. For personal data, the GDPR and Data Protection Act 2018 require a separate assessment of the lawful basis, transparency and safeguards for any sharing or transfer. Contract consent and data protection compliance are different questions.

Prepare customer communications explaining the legal supplier, effective date, payment arrangements and contact route for existing commitments. Obtain any required agreement before treating the transfer as complete. Avoid presenting silence as consent without specific legal advice.

Before handover, reconcile the customer register against the signed arrangements and payment records. Give both businesses a clear exception list for unresolved cases. This protects customer confidence and helps the new franchise community start with clear responsibilities.

Practical takeaway: Do not hand over a customer list and assume the contracts follow. Agree who owes what, secure necessary consents and reconcile the money before the franchisee takes responsibility.