Business Support and Site Visits: What to Check Before Joining a Franchise in Japan

A franchise is a network that connects the franchisor and its franchisees through a shared brand and know-how. Joining one does not, however, mean that the franchisor will run your business for you day to day. When comparing brands, look beyond initial training to the specific business support available once normal trading begins. This article explains how to assess the contractual terms for ongoing support, such as site visits and regular review meetings.

1. Break “business support” down into specific tasks

Phrases in recruitment materials such as “comprehensive support” or “a dedicated adviser by your side” describe an approach to support. They do not necessarily promise a particular number of visits or a deadline for answering queries. Start by asking the franchisor for a list of the support provided during normal trading, and establish who does what and how each service is delivered.

For example, there is a difference in value between simply receiving your sales reports and analysing customer numbers and average spend to recommend improvements. Likewise, visits to check cleanliness and customer service procedures should be understood in terms of two distinct functions: auditing compliance with brand standards and helping you improve the business.

A checklist with the following categories can help you organise your questions:

• Financial and performance monitoring: which records are analysed, such as income and expenditure, sales mix and labour costs?
• Day-to-day operations: what advice is provided on working procedures, customer service and staff training?
• Improvement recommendations: does the support go beyond identifying problems to explain implementation steps and how results will be assessed?
• Routine queries: when are telephone calls, online meetings and site visits used?

Classify each item as “guaranteed”, “at the franchisor’s discretion” or “subject to an additional charge”. Whether the support fills gaps in your own experience is a useful basis for comparing brands.

2. Check the arrangements and records, not just visit frequency

If you are told that there will be “regular visits”, ask whether this is a contractual minimum or simply an example of normal practice. If frequency varies according to location, trading performance or staffing levels, check the criteria used to make that decision. It is also important to establish whether online meetings can replace site visits.

For your designated adviser, check not only their job title but also the range of issues they can address. Someone responsible for general operations will not necessarily be able to give case-specific tax or employment advice. Ask separately who specialist issues are referred to and who pays for any external professional advice.

Also ask whether there is a system for handing over query histories and improvement plans when your adviser changes. Support backed by reports and records of action taken is easier to verify than support that depends solely on an individual’s enthusiasm.

If possible, ask to see a sample visit report with personal and confidential information removed. Look for records of “issues”, “actions to be taken”, “the party responsible”, “deadlines” and “items to review next time”. Frequent visits do not necessarily lead to improvements if they simply repeat the same observations each time.

For support channels, distinguish between opening hours and expected response times. Being able to send a message at any time is not the same as having someone available to respond at any time. Check who to contact when your adviser is unavailable and where to follow up if you receive no reply.

3. Estimate additional costs and your own workload

You need to check each agreement to establish whether ongoing business support is included in the royalty or attracts a separate support fee. Even where consultations are described as free, on-site assistance or visits by specialists may cost extra.

At a minimum, request separate estimates for:

• Routine site visits and regular review meetings.
• Additional visits requested by the franchisee, including travel and accommodation expenses.
• Fees for analytics tools and reporting systems.
• External professional advice and case-specific investigations.

As well as checking the amounts, establish whether an estimate and the franchisee’s approval are required before extra charges are incurred. Different payment rules may apply to visits the franchisor considers necessary and those the franchisee chooses to request.

Include your own workload in your financial planning. Attending meetings, entering daily reports, compiling figures and reporting improvement results all take time. If the owner serves customers or prepares food, cover may be needed during meetings. Agree with the franchisor exactly which records you will need to prepare each month, who will do the work and roughly how many hours it should take.

4. Distinguish advice from obligations and consider Japanese law

There is an important difference between an optional recommendation and an instruction you are contractually required to follow. For recommendations that involve expenditure, check whether you can propose alternatives, negotiate the implementation timetable and establish which contractual provisions apply if you do not comply.

In Japan, Article 11 of the Act on the Promotion of Small and Medium-sized Retail Business requires franchisors that fall within the Act’s definition of a “specified chain business” to provide prospective franchisees with written disclosures and an explanation before entering into a contract. This does not cover every franchise. Whether a business falls within its scope depends on criteria including whether its franchisees are primarily small and medium-sized retailers and whether, under standardised contracts, it provides or arranges the ongoing supply of goods, offers business guidance, permits the use of trade marks and collects payments on joining.

The Japan Fair Trade Commission’s Guidelines Concerning the Franchise System under the Antimonopoly Act are not limited to retail and food service businesses. They identify the content, methods, frequency and allocation of costs of operational guidance as matters that should preferably be disclosed before a contract is signed. They do not require every franchisor to provide a uniform number of visits.

The franchisor and franchisee are legally independent businesses, and their commercial relationship is subject to the Antimonopoly Act. Guidance needed to maintain brand consistency is not automatically unlawful. However, conduct that unfairly disadvantages a franchisee in light of normal commercial practices may raise concerns, depending on the circumstances. The Civil Code is also relevant to matters such as responsibility for fulfilling contractual obligations.

Rather than accepting broad wording such as “the franchisee must comply with all instructions from the franchisor”, review the agreement as a whole to establish the scope of the franchisor’s authority and the responsibilities you will bear.

5. Compare support promises with the contract before deciding

Finally, compare the presentation materials, fee schedule, support list and contract to identify any discrepancies. In particular, if you have been told that visits take place every month but the contract says guidance will be provided “as necessary”, ask for written clarification of which commitment applies.

A checklist with four columns is sufficient: “support described”, “contractual basis”, “additional costs” and “points still to confirm”. Ask for important terms to be recorded in a form both parties can verify, such as a schedule to the contract or a separate written agreement. Keep emails from the sales representative too, but do not assume that these alone necessarily amend the contractual terms.

Also check who to contact if support is not delivered as planned, and what alternative arrangements or rescheduled support you can request. A fee reduction or refund is not necessarily automatic. If you are concerned about what happens when important support is not provided, consult a lawyer before signing.

Key practical takeaway: Rather than relying on the phrase “comprehensive support”, summarise the services, delivery conditions, costs, records and arrangements for missed support on a single page. Checking that the support you need is specifically promised will help you make an informed decision about joining the franchise.