Buying a Franchise in Lebanon: Disclosure Before Paying a Reservation Fee

Buying a franchise may start with a simple request: pay to reserve the opportunity, then see the details. But taking those steps in that order could leave you financially committed before you understand the relationship. In franchising, early disclosure helps both parties make an informed decision. This guide explains how to request and review an information pack, and agree the terms of any reservation payment before the cost of walking away becomes an obstacle to your decision.

What does Lebanese law actually require?

Lebanon has no comprehensive franchise-specific law, nor a dedicated national system requiring franchise registration or delivery of a standardised pre-sale disclosure document, as some countries do. You should therefore not assume that there is a statutory cooling-off period specifically for franchises, or an automatic right to a refund of your reservation fee simply because you have not signed the final agreement.

The relationship is governed primarily by the Code of Obligations and Contracts and general commercial rules, alongside intellectual property rules and tax obligations where applicable. Consumer Protection Law No. 659/2005 regulates relationships with consumers, but it does not automatically make a franchise buyer a consumer in their commercial dealings with the franchisor. Whether Legislative Decree No. 34/1967 on commercial representation applies requires an assessment of the substance of the relationship and the legislation in force, rather than reliance on the title of the agreement alone.

There are also professional standards, which are not general legislation. The Lebanese Franchise Association’s Code of Ethics includes a commitment to full and accurate written disclosure of material information to prospective franchisees, within a reasonable time before binding documents are signed, insofar as it applies to the members and relationships concerned. If the franchisor relies on this code, ask for proof of membership and the applicable version. Do not treat it as a substitute for clear contractual protection.

Ask for a pack you can assess, not a sales presentation

Send a written request for a dated information pack before signing any binding document or paying a fee. You need more than an attractive brochure: you need information that helps you understand what you are buying and the obligations you will take on. Suggest a contents list covering:

• The identity of the franchisor and the entity you will contract with, and each party’s relationship to the brand.
• The complete draft agreement, its schedules, and any reservation or confidentiality agreement you are asked to sign.
• A schedule of initial and ongoing fees, payments due to other parties, and when each payment falls due.
• A description of the rights granted, their limits, and each party’s main obligations.
• An investment estimate, including its assumptions, what it includes and excludes, and the source and date of the figures.
• Information about the franchise network, closures or changes of ownership, and material disputes that could affect performance of the agreement.

This is a list of requests for negotiation, not a mandatory Lebanese disclosure template prescribed by franchise-specific legislation. If the franchisor refuses an item, ask for a written explanation or an alternative that serves the same purpose, such as aggregated figures that protect other franchisees’ privacy.

A confidentiality agreement with a limited purpose can make it easier to share sensitive information. Review it before signing, however: a request to see information should not become a commitment to buy, or prevent you from sharing the pack with your lawyer and accountant under appropriate confidentiality obligations.

Start the review period when the pack is complete

Agree a review period appropriate to the scale of the project, starting when the agreed documents are delivered, not at the first introductory meeting. This is a negotiated period; do not regard it, or present it to the franchisor, as a period required by Lebanese franchise law.

Create a simple review log with four columns: document requested, date received, outstanding question, and confirmed answer. Distinguish between information that is unavailable, information that is out of date, and information that conflicts with the draft agreement. A difference between the fees in the proposal and those in a schedule, for example, is a reason to request a consistent set of documents before deciding.

Divide the work: your lawyer should review the legal effect of the documents and any pre-contractual obligations, while your accountant checks that all cost elements are included and the assumptions are consistent. Your role is to ensure that questions which could change your buying decision receive clear answers, rather than being deferred to a later discussion.

When signing an acknowledgement of receipt, limit it to a specific list of documents, with their versions and dates. Receiving a pack is not the same as confirming that all its information is correct or waiving your right to raise objections. If a material change occurs before signing, request an updated pack and additional time to assess it.

Agree clear reservation fee terms before paying

If the franchisor asks for a fee to reserve the opportunity, keep the reservation agreement separate from the decision to buy the franchise. The agreement should state exactly what is being reserved, for how long, and whether the payment will be credited towards the initial fees when you sign.

Ask for the circumstances in which the payment will be refunded to be specified: failure to deliver the agreed information pack, changes to material terms, or failure to meet specified preconditions. Also set out the refund deadline and payment method, along with any permitted deductions and the documents needed to support them. Do not settle for the word ‘refundable’ without a procedure for obtaining the refund.

Verify the identity of the payment recipient and their authority to receive it, and obtain a receipt stating the payment’s purpose and referencing the reservation agreement. If the payment is non-refundable, treat it as a potential cost of the deal falling through, not as a formality. You can propose postponing payment until the review is complete. A refusal is not, on its own, evidence of bad faith, but it is an important factor in assessing the risk.

The practical takeaway: Request a dated information pack, record what is missing, and agree time for review and written refund terms before paying. Reserving the opportunity should not come before understanding the commitment.