Franchising in Italy: check the rules on relocating your premises

Before joining a franchise network, consider what would happen if your outlet needed to move. The expiry of a lease, prolonged building works or changes in customer traffic could make relocation necessary. Finding better premises is not enough, however: before signing, you need to understand the contractual restrictions and how to obtain the franchisor’s consent.

Italian rules on relocating premises

Franchising in Italy is governed by Law No. 129 of 6 May 2004, on commercial franchising. The specific provision on relocation is Article 5: where the premises are identified in the contract, the franchisee may not relocate without the franchisor’s prior consent, except in cases of force majeure.

Your first check is therefore a practical one: look for the address in the contract and its schedules, and check how the premises are defined. Do not confuse relocating the outlet with simply changing the company’s registered office: establish exactly which premises the contractual restriction covers.

Finding more affordable premises does not automatically constitute force majeure. Nor does a fall in sales, on its own, mean you can assume you may proceed without consent. Whether force majeure applies must be assessed against the actual circumstances, with legal advice.

Article 4 of the same law requires a complete copy of the contract and the prescribed documentation to be provided at least thirty days before signing. Use this period to clarify the relocation rules too, rather than leaving the issue until it becomes urgent.

Making the consent procedure clear and verifiable

A clause requiring only “head office approval” leaves many practical questions unanswered. Before signing, ask for the application process to be defined and discuss with your adviser which details should be included in the agreement.

The procedure should clarify at least:

• who should receive the application and through which channel;
• which documents must be submitted about the new premises;
• which criteria will be used to assess them;
• the deadline for a response;
• how any reasons for refusal will be communicated;
• how long the approval will remain valid.

These are terms to negotiate, not deadlines or obligations that are all automatically imposed by Italian franchising law. In particular, do not assume that the franchisor’s silence amounts to permission.

Also ask whether consent will cover only the address or also the floor area, design, accessibility and fit-out. Preliminary approval of the area may not be enough to start work.

Within a franchise network, transparent criteria help both parties: the franchisee can assess realistic alternatives, while the franchisor can maintain consistency across the network without treating every request as an exception.

Separating permission, costs and business continuity

Consent to relocate does not automatically establish who will pay for the move. Ask for a breakdown of the services required by the network and how they will be charged: site visits, design work, modifications to fixtures and fittings, IT installation and publicity for the reopening.

In particular, check whether relocating will mean adopting the brand’s latest store format. Moving usable fixtures and fittings and completely refitting a shop have very different financial implications. Ask which items can be reused and who will assess whether they meet the required standards.

The closure period also needs clear provisions. You need to know whether any fixed fees will remain payable during the move, which services will continue and how orders, bookings and customer enquiries will be handled.

To assess the risk, work with your accountant on a simple relocation scenario covering a temporary overlap in rent, removal costs, building works, downtime and reopening. You do not need to identify a future address now; the aim is to understand which financial commitments could be triggered and which would still need to be agreed.

Recording what changes and what stays the same

Before committing to new premises, have an adviser check that the franchisor’s consent is compatible with the terms of the new lease. The franchisor’s approval does not replace the administrative checks required to operate the business at the new location.

Also ask whether the relocation will be formalised through an addendum or require a new contract. The document should specify the approved address, timetable, agreed costs and any conditions to be met. Check expressly whether the franchise agreement’s expiry date and other financial obligations will remain unchanged: assume neither that they will change nor that they will stay the same.

Keep applications, responses and approvals together in a single file. Verbal assurances are a fragile basis for committing to a new lease or ordering a fit-out.

In practice: before joining, ask for a written relocation procedure, clear approval criteria and a clear allocation of costs. Assess your ability to relocate before it becomes a necessity.