Choosing Your First Franchisee in Lebanon

When you decide to franchise an established business in Lebanon, the first candidate with enough funding may seem like an opportunity too good to miss. Yet your first partner will influence your brand’s reputation and how you work with the wider franchise network. So do not make closing the sale your selection goal. Aim instead to find a franchisee who can run the business to your standards, meet their financial responsibilities and work with you without relying on your constant presence.

1. Define the partner you need before accepting applications

Write a clear description of the franchisee’s role, rather than a general advert for an investment opportunity. Does your business need an owner who runs the outlet day to day, or could a full-time manager operate it? Which skills are genuinely essential: team management, stock control, customer service or business-to-business sales? Link each requirement to an operational task, rather than asking for extensive experience simply for reassurance.

Distinguish between non-negotiable requirements and skills that can be taught. A commitment to quality, the ability to interpret financial results and the agreed level of time commitment are essential. Using sales software or following a product display method, however, can be taught if the candidate demonstrates a willingness to learn.

Create a standard assessment scorecard covering four areas: financial capacity, management capability, commitment to the operating system and understanding of the local market. Under each heading, record the evidence required. Do not give candidates high scores simply because they speak persuasively; ask for a real example of a problem they addressed and the outcome they achieved.

2. Assess funding and time, not enthusiasm

Ask the candidate to prepare an outline of their funding sources and planned expenditure, including fit-out, stock, pre-opening expenses and working capital. The purpose is not to revisit the franchise fee, but to check that paying the start-up costs will not leave them unable to fund the outlet once it opens.

Discuss their own funds and any borrowing, repayment commitments and how heavily the business will depend on immediate revenue. In Lebanon, ask explicitly which currencies will be used for revenue, expenses and liabilities, and how the candidate will handle currency mismatches or an inability to access some of their funds. Do not assume that owning assets means having access to usable cash.

With the candidate’s consent, request appropriate supporting documents, limited to what is necessary, and involve an accountant where needed. Keep financial information confidential and restrict access to those involved in the assessment.

Assess their time commitment too: who will be present at the outlet? Who will make recruitment and purchasing decisions? If the candidate says a family member will manage the business, include that person in the assessment process. Do not treat a promise as a substitute for identifying a clearly accountable, qualified manager.

3. Test behaviour through realistic operating scenarios

Arrange an observation visit to an existing outlet, while protecting sensitive information and respecting staff and customers. This is not another test of the business model; it is an opportunity to understand how the candidate thinks. Ask them to describe what they noticed, what they need to learn and how they distinguish between an essential brand standard and a personal preference.

Use practical scenarios in a structured interview:

• A customer complains about the quality of their order during a busy period: how would the candidate resolve the complaint while maintaining service?
• A local supplier offers a cheaper but unapproved material: would they buy it immediately or follow the approval process?
• A high-performing employee repeatedly breaches a key procedure: how would they balance training with accountability?
• Sales decline: what information would they review before requesting a price reduction?

Look not for rehearsed answers, but for an ability to ask questions and make disciplined decisions. With the candidate’s consent, contact professional referees to check their record of meeting commitments and managing disagreements. Record facts, and avoid rumours or personal questions that do not help assess their suitability for the role.

4. Conduct negotiations within Lebanon’s legal framework

Lebanon has no comprehensive franchise-specific law, nor a dedicated franchise disclosure regime comparable to those in some other countries. The relationship is governed primarily by the Code of Obligations and Contracts, alongside commercial rules, intellectual property protections and other relevant provisions depending on the activity. The absence of a specific law does not mean there is no liability for promises or information provided during negotiations.

Nor should you assume that calling an agreement a ‘franchise’ determines its legal classification. There is legal and judicial debate over whether Legislative Decree No. 34 of 1967 on commercial representation applies to certain relationships. Your actual arrangement therefore needs review by a Lebanese lawyer, rather than a copied template contract.

Before sharing sensitive information, establish confidentiality obligations and limits on its use. If you sign a memorandum of understanding, specify which provisions are binding and which are not, along with the terms of any reservation or payment and the conditions for a refund. Do not give candidates the right to use the brand or advertise themselves as an authorised partner simply because they have entered the assessment stage.

5. Document your decision and remain willing to say no

Bring the interview findings, financial checks and practical scenario assessments together in one file. Discuss the assessment with your operations lead and relevant advisers, then decide whether to accept the candidate, carry out specific further checks or reject them with the reasons recorded internally. Do not let a ready-to-use site or pressure to meet an opening date justify overlooking a serious warning sign.

If a gap can be addressed, such as the lack of a suitable manager, make resolving it a clear condition before signing the final agreement. A refusal to follow standards or the provision of misleading information, however, cannot be offset by greater enthusiasm or financial capacity.

Practical takeaway: Before accepting your first franchisee, ask for evidence of funding, time commitment and operational discipline. Document your assessment and have the arrangements legally reviewed. Delaying the decision is better than entering a relationship built on compromises you already know could put your brand at risk.