Franchising: check fixtures and equipment before signing

A ‘turnkey’ franchise offer may include counters, shelving, machinery and till systems, but the term does not explain who will own them or who must pay when something breaks down. Before joining a franchise network, turn the sales promise into a verifiable list of assets, terms and responsibilities. This is a separate exercise from assessing stock: it concerns the tools the business will actually need to operate.

1. Identify what is supplied and on what basis

Ask for an inventory of the fixtures and equipment included in the offer, linked to the quotation and referenced in the contractual documents. For each item, this should include at least a description, quantity, technical specifications, whether it is new or used, and who supplies it. A vague entry such as ‘complete fit-out’ makes it difficult to compare offers or challenge an incomplete delivery.

The crucial distinction is between having the use of an asset and owning it:

• Purchase: check who is selling the item, its price and when ownership passes to you, including any retention-of-title provisions until payment is made in full.
• Hire: check the hire charges, duration, included services and return conditions. Paying hire charges does not automatically mean you will own the item at the end.
• Finance lease: examine the agreement with the finance provider, your financial obligations and any option to purchase.
• Loan for use (comodato): clarify how long you may use the item, your responsibilities for looking after it and when it must be returned. Ownership remains with someone else.

If several suppliers are involved, prepare a table linking each item to the relevant contract. The franchisor may coordinate the fit-out without being the seller of the goods. Knowing who is responsible for each supply helps avoid directing claims or requests to the wrong party.

2. Link the quotation to the franchise agreement

In Italy, franchising is governed by Law No. 129 of 6 May 2004. Article 3 requires the agreement to be in writing, otherwise it is void, and stipulates that it must expressly state the amount of investment and any entry fees the franchisee must pay before starting the business.

Article 4 also requires the franchisor to provide a complete copy of the agreement, together with the annexes required by law, at least thirty days before signing, subject to specific exceptions relating to confidentiality. Use this period to check that the stated investment is consistent with the fixtures and equipment you need.

This does not mean the law automatically guarantees a complete package or free furnishings. The phrases ‘turnkey’ and ‘at no cost’ are no substitute for contractual terms.

Ask whether the price includes VAT, transport, assembly, connections, configuration and operational testing. Have any exclusions listed separately. Even an included machine may require paid technical work before it can be used.

If the quotation allows models to be substituted, ask for criteria defining an equivalent replacement and an approval process. The aim is not to prevent every change, but to avoid essential equipment being replaced with something less suitable without a documented comparison.

3. Agree delivery, inspection and support arrangements

The availability of the goods must be coordinated with the planned opening date. Ask for a schedule that distinguishes between delivery, installation and operational checks, identifying who is responsible at each stage.

Also agree how missing items, visible damage and problems discovered during testing will be recorded. A detailed report, noting any reservations and including photographs where appropriate, is more useful than a general declaration of complete satisfaction signed before checks have taken place.

Before accepting the goods, clarify:

• who arranges technical support and what response times the contract specifies;
• which work and components are covered;
• who pays call-out charges, transport and labour costs;
• whether a replacement machine is available during downtime;
• which technical documents, instructions and applicable certificates will accompany the goods.

A franchisee normally purchases in the course of their business, so you should not assume that consumer protections apply. Warranties, deadlines for reporting defects and available remedies should be checked for each contract with a qualified adviser.

4. Assess replacement needs and what happens to the assets at the end

Your checks should also cover the useful life of the fixtures and equipment. Ask who pays for routine maintenance, major repairs and replacements due to wear and tear. Distinguish these from upgrades required to bring the premises into line with the franchise network’s image or standards.

For hired, leased or loaned assets, check whether your obligations continue after the franchise relationship ends. Do not assume that separate contracts will end together.

For purchased assets, clarify whether they can be reused or resold once branding has been removed. If a buy-back is offered, ask for the terms to specify the conditions, how the condition of the assets will be assessed, the price or calculation method, and collection costs.

In practice: before signing, every essential item should have an identified owner, a clear cost and written rules covering delivery, support and what happens to it at the end. If any of these elements is missing, ask for the agreement to be completed before committing.