Franchise software in Mexico: what to check before you buy

Before buying a franchise, ask which systems you will need to make sales, take payments and manage the outlet. Mandatory software can mean recurring costs and dependence on a supplier you did not choose. Within a franchise network, shared technology makes coordination easier, but you still need to agree on costs, responsibilities and access to your business information.

1. Identify which technology you must sign up for

Ask for a written inventory of the required systems: point of sale, business management, ordering, invoicing, reservations or customer management, depending on the business model. A sales presentation that says ‘technology included’ is not enough.

For each tool, request a specification covering:

• Function: which tasks it supports and which fall outside its scope.
• Supplier and contracting party: who provides the service and who signs the licence agreement.
• Users and outlets: how many user accounts and locations the price covers.
• Dependencies: which internet connection, devices or additional services it requires.
• Mandatory use: whether you can use alternatives and who must approve them.

Distinguish between the franchisor’s own system and third-party software. If you will contract directly with a supplier, ask for its terms as well: the franchise agreement will not necessarily resolve problems with that company.

Request a demonstration of everyday tasks, rather than just a presentation. For example, check how to record a return, correct a payment and generate an end-of-day report. Ease of use also affects how much time your staff will need.

2. Calculate the full cost, not just the monthly fee

Separate set-up charges from recurring expenses. Items worth asking about include configuration, data migration, per-user licences, storage, support, updates and integrations with other systems. Not every proposal will include all of these: the aim is to confirm which apply.

Prepare a table listing each charge, who receives the payment, payment frequency, currency, taxes and the terms governing price increases. If a quotation is in a foreign currency, establish how the amount payable in Mexican pesos will be calculated.

Pay particular attention to usage-based charges. A licence may have a base price plus extra charges for transactions, terminals, outlets or data volumes. Ask for worked examples based on your expected operations and on higher demand.

Also clarify what happens when the franchisor requires an upgrade. Is it included in the licence? Does it require new devices? Who pays for installation and the time needed to adapt? Do not budget for something as free simply because it is not itemised.

Include these expenses in your assessment of the purchase as clearly identified commitments, separate from royalties. This will help you avoid counting a service twice or assuming that another payment covers it.

3. Put the technology terms in the contract

In Mexico, franchises are specifically regulated by the Federal Law for the Protection of Industrial Property (Ley Federal de Protección a la Propiedad Industrial, or LFPPI). The Regulations under the Industrial Property Law are also relevant to pre-contractual disclosure.

Article 246 of the LFPPI requires franchise agreements to be in writing and sets out their minimum content, including policies, procedures and deadlines relating to reimbursements, financing and other payments due from the parties. Pre-contractual information must include the amounts and types of payments the franchisee must make to the franchisor.

This does not mean that the law sets a technology fee or guarantees specific support terms. You need to check how these are documented for your particular arrangement.

Ask for the agreement, or a clearly identified annex, to set out the mandatory systems, the services included and the allocation of responsibilities. If there are separate supplier agreements, ask your lawyer to check that they are compatible. Avoid relying on sales promises that do not appear in the documents you are about to sign.

4. Protect business continuity and access to your records

Before committing, ask what happens if the system stops working. Agree on support channels, service hours, priority criteria and procedures for operating during an outage. Distinguish between the time allowed for an initial response and the time allowed to resolve a fault.

Clarify who can view, correct, download or back up your outlet’s records. Do not assume that access to an on-screen display means you can export the information. Where personal data is involved, seek specialist advice on the applicable responsibilities and safeguards.

Finally, check how you will retrieve the records needed to meet your accounting and administrative obligations if the software licence ends. Agree on the format, timeframe and any charges for supplying them; do not leave that conversation until access has been suspended.

Practical takeaway: before buying, gather the technology inventory, the full costs, and the terms for service and data access. If you cannot explain who charges you, who is responsible and how you will retrieve your records, an important part of the purchase still needs clarification.