Franchising: handling franchisee complaints

Turning an existing business into a franchise network also means preparing for disagreements. A disputed delivery, a service considered inadequate or an unclear charge can undermine trust if nobody knows how to respond. Before welcoming your first franchisee, you need a procedure for receiving, investigating and resolving complaints: not to prevent challenges, but to handle them transparently.

1. Distinguish complaints from requests for support

A support request asks how to carry out a task; a complaint reports that a commitment has not been met or that something has caused a problem. This distinction allows the franchisor to assign the case to the right person, rather than leaving a financial dispute in the routine queue of operational enquiries.

Set up a clearly identified channel for written complaints, even a simple one: a dedicated email address or a form in the franchisee portal. Ask only for the information you need:

• what is being disputed and when it happened;
• the service, supply or charge concerned;
• the documents available;
• the practical impact on the business;
• the solution requested by the franchisee.

Do not let the form become a barrier. If a complaint is raised during a telephone call, the person receiving it should summarise it in writing and ask for confirmation. Also make clear that this operational channel does not replace formal notices required by the contract, such as a notice of dispute sent via Italy’s certified email system, PEC.

2. Assign responsibilities and priorities before launch

When business owners run only their own outlets, they often resolve every problem personally. This approach becomes less reliable as the number of people involved grows. For your future franchise network, specify who records complaints, who investigates the facts and who can authorise a solution.

The person responsible for the investigation should not automatically be the person whose conduct is being challenged. In smaller organisations, another manager can step in or, in sensitive cases, an external professional. The aim is to avoid a response that merely defends work already done.

Set separate internal targets for acknowledging complaints, providing updates and issuing a final response. These are organisational targets that must be realistic, not deadlines generally imposed by franchising law. If the investigation needs more time, explain why and give a date for the next update.

Provide an urgent route for problems involving safety, personal data or business continuity. In these cases, complaint handling must run alongside, rather than delay, any necessary action or compliance measures.

3. Establish the facts and explain the solution

Create a concise file for each case: the initial complaint, a timeline, supporting documents, checks carried out and the decision. Retrieve the version of the relevant commitments that applied when the problem arose, rather than judging past events against procedures changed later.

Imagine that a franchisee disputes an invoice for technical work they believed was included. Before responding, check what the agreement covered, what request was submitted, whether the additional cost was communicated and who authorised the work. The invoice alone does not explain the disagreement.

The final response should distinguish between:

• established facts and matters still in dispute;
• the relevant commitments;
• the outcome of the investigation;
• any remedy and who must implement it;
• the options available if the disagreement remains unresolved.

A credit, a repeat service or clarification supported by documents may each suit a different problem. Avoid automatic compensation and promises that the person handling the complaint has no authority to make. If the solution involves waiving rights or settling a dispute, have a lawyer draw up the agreement.

4. Align the procedure with Italian law

In Italy, franchising is governed by Law No. 129 of 6 May 2004, on commercial franchising. An internal complaints procedure does not replace contractual protections or legal remedies, nor is it, in itself, an obligation expressly imposed by this law.

Article 7 allows the parties to agree that, before taking a dispute to court or arbitration, they will attempt conciliation through the chamber of commerce with territorial jurisdiction. This is an option to consider when drafting the contract, not a mandatory step in every franchise relationship. A lawyer should also check any other procedural rules applicable to the particular dispute.

The law also has a practical implication for corporate record-keeping: Article 4 requires pre-contractual disclosures to include a brief description of any relevant court or arbitration proceedings concluded in the previous three years, within the scope set out in that provision. An internal complaint is not equivalent to legal proceedings, but keeping an orderly record of its progress helps establish an accurate account of events.

In practice: before taking on franchisees, simulate a complaint, assign someone to handle it and test the entire process through to the written response. A reliable franchise network does not eliminate disagreements: it knows how to handle them without improvising.