Customer Complaints in Lebanese Franchises: Managing Resolution and Compensation

When customers deal with an outlet bearing your brand, they expect a clear resolution to their problem, not a debate about who owns the outlet. Turning an existing business into a franchise therefore requires a complaints system that works across two independent businesses while maintaining a consistent experience throughout the franchise network. This means more than promising that ‘customer satisfaction comes first’: before granting a franchise, define who can authorise remedies, how complaints are escalated, and how compensation is documented and funded.

The legal framework: separate customer rights from internal settlements

Lebanon has no comprehensive franchise-specific law, nor a mandatory franchise disclosure regime comparable to those in some other countries. The contractual relationship is governed primarily by the Code of Obligations and Contracts, alongside other relevant general rules. Whether commercial representation provisions apply may depend on the substance and legal classification of the relationship, rather than simply on whether the agreement is labelled a franchise.

Dealings with customers are also subject to Consumer Protection Law No. 659/2005, as amended, which the Ministry of Economy and Trade enforces within its remit. An agreement between the franchisor and franchisee allocating responsibilities cannot, therefore, override a statutory consumer right. Have a Lebanese lawyer review your exchange, refund and warranty policies in light of the goods or services you provide. Do not assume that a ‘no refunds or exchanges’ notice settles every case.

Distinguish between two issues in your documentation: the remedy due to the customer, and the allocation of its cost between franchisor and franchisee. The latter can be governed by contract, but the former should not be put on hold until an internal dispute has been resolved. Equally, your system should not imply that the franchisor is legally responsible for every action taken by an outlet; liability is assessed on the facts and applicable law.

Map the complaint journey before allocating authority

Start with your business’s existing contact channels: the point of sale, telephone, email and social media accounts. Specify who monitors each channel and how a complaint received through the brand’s central account reaches the relevant outlet. Give each complaint a single reference number so that customers do not have to explain the problem repeatedly to different people.

Create a short form recording the outlet, the date of the incident, a description of the problem, available proof of purchase, the requested resolution and the action taken. Collect only the information needed and control access to it, particularly where personal or health details are involved. Do not share customer details or images of their documents in large messaging groups simply to speed up the response.

Classify cases by severity, not by how loudly the customer complains:

• A routine service complaint that the outlet manager can resolve within their authority.
• A billing or warranty dispute requiring a review of the documents and applicable policy.
• Suspected harm to health or a safety risk requiring urgent escalation to the designated person.

Set internal time targets for acknowledging complaints, providing an initial response and issuing updates when resolution is delayed. Explain to the team that these are operational targets, not general statutory deadlines. In serious cases, staff must not wait for a scheduled meeting or marketing approval before escalating a report.

Define who authorises compensation and who bears the cost

Create an authority matrix setting out what staff can offer, what the outlet manager can decide and what requires the franchisor’s approval. Distinguish between correcting an incorrect order, replacing a product, issuing a refund and offering an additional goodwill gesture. A discretionary gesture is not a substitute for a legally required remedy.

Allocate costs according to the established cause of the complaint, not where it was received. If the outlet made a mistake when fulfilling an order, the internal cost allocation will differ from a case arising from flawed central instructions or promotional wording supplied by the franchisor. Where the cause is unclear, designate the party that will fund the remedy temporarily and establish a process for reviewing the costs later, without presuming that party is ultimately liable.

For example, a customer might complain that the service provided differed from an offer published on the brand’s central account. Retain a copy of the offer, check its terms against what the outlet delivered, and then make a clear decision on the customer’s complaint. Do not send the customer back and forth between the central account and the outlet in search of someone authorised to decide.

Also specify the documentation required for compensation: evidence of approval, the refund method, accounting records and any settlement between the parties. Avoid automatically deducting amounts owed to the franchisee without supporting documents and an agreed process for challenging the deduction. Ask your accountant to determine the appropriate treatment of invoices and accounting entries.

Test the system and use complaints to drive improvement

Before granting a franchise, trial the process in your existing business using a range of hypothetical cases. Test a complaint received outside management’s working hours, another involving more than one outlet, and a case in which the customer rejects the initial solution. Check whether staff know who has decision-making authority and whether documents remain accessible as the case passes between people.

Set out the core obligations, financial authority and cost-allocation mechanism in the agreement or another clear contractual document, leaving implementation steps and forms to the procedures manual. Do not give management unrestricted power to change financial obligations relating to compensation simply by revising an operational form.

Regularly review the causes of recurring complaints, the time taken to close them and cases that have been reopened. Do not treat a fall in complaint numbers as a success if customers find it difficult to submit them. The aim is to identify problems that can be fixed, not to encourage outlets to conceal them.

Practical takeaway: Before signing your first franchise agreement, prepare a standard complaints form, an authority matrix and a documented rule for allocating costs. Then test them in practice and review their compliance with consumer rights in Lebanon.