Franchise Outlet Disruption in Lebanon: Business Continuity Planning and Contract Terms

Before offering franchises for your existing business in Lebanon, ask yourself: what happens if an outlet cannot operate normally? The loss of an essential service, an inaccessible site or an ordering system failure can turn a temporary problem into a dispute over fees and responsibilities. Within a franchise network, a business continuity plan protects the relationship by clarifying what can keep running, what must be suspended and how the outlet will resume operations—without assuming that every disruption constitutes force majeure.

Distinguish operational disruption from force majeure

Lebanon has no comprehensive franchise-specific law, nor a dedicated statutory regime requiring a standardised disclosure document. The relationship is governed primarily by the Code of Obligations and Contracts and the Commercial Code, alongside other rules applicable to the business activity. Disruption should therefore be addressed in the contract, rather than covered only by a broad heading such as ‘exceptional circumstances’.

Force majeure is a legal classification that depends on the facts of an event and its effect on the performance of an obligation. It is not a label the affected party can apply unilaterally. Rising costs or falling sales do not automatically make performance impossible, and a repairable equipment failure is different from an event that prevents access to the outlet. A Lebanese lawyer should review the wording and effects of the clause in light of the general legal rules.

In practice, build your operating plan around three situations, treating them as management categories rather than legal conclusions:

• Limited disruption: operations continue using an approved workaround.
• Partial operation: certain services are suspended while others remain available.
• Temporary full shutdown: the outlet closes until the obstacle has been removed and the conditions for reopening have been verified.

This distinction allows you to act quickly to protect people and products, without waiting for a dispute over the event’s legal classification to be resolved.

Turn risks into an actionable plan

Start with your business’s actual dependencies: electricity, connectivity, software, access to storage facilities or essential equipment. Do not copy a generic checklist. For each dependency, identify which function stops if it becomes unavailable, how long operations can safely continue and which alternative the network can realistically support.

Use a short response sheet for each scenario, covering the trigger for activating the plan, who can decide to suspend operations, the workaround, its limits and the evidence needed to confirm that service has been restored. If the ordering system fails, for example, may orders be recorded manually? How will duplicate orders be prevented and payments reconciled once the system is back online? If no safe alternative exists, the plan should require the affected service to stop.

Allocate responsibilities according to what each party can control. The franchisee will usually manage the response at their premises, while the franchisor addresses matters under its control, such as a central platform or standard operating instructions. Do not let a statement such as ‘the franchisee must ensure continuity’ replace a clear allocation of responsibility for the franchisor’s own systems and tools.

Test the plan through a tabletop exercise before offering franchises: assume connectivity has been lost and ask the manager to explain the steps they would take and the documents they would use. The aim is to identify decisions that still depend on the founder being present, not to conduct a complex technical test.

Link disruption to notifications, fees and approvals

The contract should explain how the plan is activated: who receives notice, which communication channel should be used, what information is required and how updates on the outlet’s status will be provided. Set a realistic contractual deadline for notification, with an alternative if the usual communication channel fails. The initial notice need only describe the event, the services affected and the action taken; available supporting documents can follow.

Avoid requiring prior approval for every urgent safety measure. Where necessary, the affected service can be suspended immediately, with the franchisor notified and the reason documented. Alternatives that change the customer experience or the way a product is provided, however, need a clear approval process.

Distinguish between financial obligations rather than stating categorically that ‘fees continue’ or ‘fees stop’:

• Sales-based royalties should be assessed against the agreed definition of sales and calculation method.
• Fixed fees need express provisions on whether they are deferred, reduced or remain payable during disruption.
• The costs of alternative arrangements require clarity on who approves them and who pays for them.

These are matters for negotiation, not automatic legal exemptions. Record any temporary arrangement in writing, including its start and end dates and whether amounts are deferred or waived, so that urgent support does not become a disputed debt.

Set reopening conditions before a shutdown occurs

Removing the apparent cause of disruption is not enough to justify reopening an outlet. Establish a checklist suited to the business: equipment safety, stock condition where relevant, restoration of systems and reconciliation of transactions recorded during the disruption. Specify who carries out the checks and who authorises reopening. Avoid requiring a site visit that the franchisor cannot arrange promptly if documented remote verification is sufficient for the circumstances.

Prepare a consistent customer message stating which services are available and any confirmed times for their restoration, without making promises that cannot be substantiated. After operations resume, record the cause of the disruption, the measures that worked and any gaps, then update the plan jointly.

If the shutdown continues for an extended period, the contract should require both parties to undertake a documented review of their options, rather than leaving the outlet in limbo indefinitely. The practical takeaway: before granting a franchise, prepare a response sheet for each critical disruption and link it to a contractual clause covering notification, costs and reopening conditions. The operating plan and the contract should lead to the same decision.