Franchising: answering prospective franchisees’ questions

When you turn an existing business into a franchise network, prospective franchisees want much more than a sales presentation: they want to understand the results, challenges and practical commitments involved. Preparing your answers before negotiations begin helps avoid contradictions and supports better-informed decisions. You need a method for recording questions, checking facts and explaining what you cannot disclose.

1. Distinguish mandatory disclosure from answers to questions

In Italy, franchising is governed by Law No. 129 of 6 May 2004. When handling prospective franchisees’ requests, you need to distinguish between two related but separate obligations.

Article 4 requires the franchisor to give the prospective franchisee a complete copy of the proposed contract, together with the attachments required by law, at least thirty days before signing, subject to the specific exceptions set out in that provision.

Article 6, by contrast, concerns conduct during negotiations: the franchisor must act honestly, fairly and in good faith, and promptly provide any data and information that the prospective franchisee considers necessary or useful for entering into the agreement. Exceptions apply to information that is objectively confidential or whose disclosure would infringe third-party rights; any refusal must be explained.

Providing the pre-contractual disclosure pack does not, therefore, bring the exchange of information to an end. If a prospective franchisee asks how a particular cost item works or what resources underpin the promised support, that question also needs to be addressed. Have your approach reviewed by a lawyer with expertise in Italian franchise law.

2. Create a request log and assign responsibilities

Before you start recruiting franchisees, appoint a contact person to collect questions received by email, in conversations and at meetings. They do not need to know every answer themselves: they need to know who can verify it.

Set up a log with the following fields:

• date of the request and the prospective franchisee’s name;
• the full question, without ambiguous summaries;
• the person responsible for checking the answer;
• the document or data used to answer it;
• the status of the request and the date of the response;
• any subsequent clarifications or updates.

Assign financial questions to the finance team, operational questions to those running the business, and contractual questions to your appointed legal adviser. The person responsible for franchise development should coordinate the relationship, but should not improvise answers on subjects outside their expertise.

Set internal targets for acknowledging and assigning requests, and explain when a question needs further investigation. These targets are organisational tools, not substitutes for the legal requirement to respond promptly. Avoid leaving an important issue unresolved while pressing for a signature.

After an important conversation, send a written summary: this allows the prospective franchisee to correct any misunderstandings and creates a shared record.

3. Answer with clearly contextualised data, not reassurances

A useful answer specifies which business, period and circumstances it relates to. The performance of the original outlet does not automatically indicate what a new franchisee will achieve.

Imagine this question: ‘How many people will we need to run the outlet?’ Answering ‘two staff will be enough’ can obscure crucial variables. It is better to explain the staffing levels observed in the existing business, the hours covered, the work done by the owner and the circumstances in which additional staff are needed.

For every significant answer, distinguish between:

• verified facts, supported by documents or recorded observations;
• assumptions, dependent on conditions that have yet to be confirmed;
• judgements, clearly identified as such.

If the data does not exist, say so. Do not present an estimate as an observed result, or use the founder’s personal experience as universally applicable evidence.

Prepare standard answers to frequently asked questions, but adapt them to each case. If you discover an error, correct it promptly, including for other prospective franchisees who received the same information. Consistency helps preserve trust across the franchise network.

4. Address confidentiality and unresolved questions before signing

Confidentiality should not become a blanket excuse for avoiding awkward questions. Assess which information genuinely needs protection and why. A document may, for example, contain employees’ personal data or commercial information belonging to third parties.

Where possible, consider providing aggregated information, a redacted copy or a more limited explanation. A confidentiality agreement can help protect certain information, but it does not automatically authorise the disclosure of third-party data or replace statutory obligations.

If you refuse a request, explain why and keep a written record of the refusal. Before signing, review the log: which answers are still missing? Which still require checks? Which have changed the prospective franchisee’s understanding of the investment? Do not ask them to sign a blanket statement of satisfaction to cover substantive gaps in the information provided.

In practice: before your next meeting, prepare a question log, appoint those responsible for answering and check the answers to five real questions. A credible franchise network starts with information that is understandable, verifiable and consistent.