Franchise disclosure documents in Mexico: how to prepare yours

Before granting your business’s first franchise, you need to explain in writing which company is offering it and what terms will govern the relationship. This pre-contractual information, commonly known in Mexico as the Circular de Oferta de Franquicia (COF), allows prospective franchisees to assess the proposal. Preparing it carefully helps build a franchise network based on clear expectations rather than sales promises.

1. Understand what Mexican law requires

In Mexico, franchising is specifically regulated by the Federal Law on the Protection of Industrial Property (LFPPI). Article 245 requires franchisors to provide prospective franchisees with information on the state of their business at least thirty days before entering into the agreement.

When planning your timetable, ask your legal adviser to confirm how this period must be calculated and establish the earliest permissible signing date. Do not shorten the period because a prospective franchisee wants to open quickly or says they already know the business.

The required information is set out in Article 65 of the Regulations under the Industrial Property Law, which apply insofar as they do not conflict with the LFPPI. It is worth distinguishing between these names: the current law replaced the former Industrial Property Law.

The COF is not a sales brochure and does not replace the franchise agreement. Nor does it need to be submitted to the Mexican Institute of Industrial Property (IMPI) to obtain permission to sell franchises. Providing it is a pre-contractual obligation, separate from procedures relating to the trade mark or registration of the agreement.

2. Gather the information and supporting documents

Organise the information required by the regulations into clear sections. The disclosure file should cover:

• The franchisor’s name or registered company name, address and nationality.
• A description of the franchise and how long the business has been operating; where applicable, also how long the master franchisor has been operating.
• The intellectual property rights involved.
• The amounts payable by the franchisee to the franchisor and what each payment covers.
• The types of technical assistance and services to be provided.
• The geographical area of operation.
• Whether sub-franchises may be granted and, if so, the requirements for doing so.
• Obligations relating to confidential information received.
• More generally, the rights and obligations arising from the agreement.

Simply filling in a template is not enough. For each section, identify who will confirm the information and which document supports it: for example, the company’s incorporation document, trade mark records, a service catalogue or the proposed agreement.

If your company has been operating for several years but the format you intend to franchise has only just launched, distinguish clearly between the two timelines. If there are no franchised outlets yet, say so explicitly. Experience running the original business is not the same as experience supporting franchisees.

You can add useful context, provided you clearly separate legally required disclosures from supplementary information and avoid presenting estimates as guaranteed results.

3. Check that the offer reflects how the business actually operates

Before approving the COF, compare its contents with the proposed agreement and the messages used to attract prospective franchisees. One practical approach is to create an internal table with four columns: topic, sales claim, COF disclosure and corresponding contractual clause.

Look for specific inconsistencies. For example, the sales presentation might promise ongoing on-site support while the document only provides for remote assistance. It might also advertise an exclusive territory when the proposed agreement grants no exclusivity.

Do not resolve these differences with vague wording. Decide what the company can realistically commit to delivering and amend every affected document.

Arrange a joint review by those responsible for legal matters, finance and operations. The legal reviewer checks compliance; finance confirms the payments and what they cover; operations checks that the services described can actually be delivered. Keep a record of the approval and the date as at which the information is current.

4. Document delivery and control versions

Prepare a straightforward procedure for each prospective franchisee:

1. Identify the individual or company receiving the document.
2. Give the document a date and version number.
3. Deliver a complete file, including all appendices.
4. Obtain evidence of receipt identifying exactly what was delivered.
5. Record any questions and provide written clarifications.
6. Confirm that the required disclosure period has elapsed before authorising signature.

A generic acknowledgement stating only ‘I have received information’ is less clear than one identifying the version, date and appendices. Electronic evidence must also establish what the prospective franchisee received and when; retain the full record, not just a screenshot.

If material terms change during negotiations, do not quietly replace the file. Issue an identifiable new version and seek legal advice on the update and its implications for the timetable. An acknowledgement proves receipt, but it does not make inaccurate information true or remove liability.

In practice: before offering your first franchise, prepare a verifiable COF that is consistent with what you can deliver, supported by a documented delivery process. Transparency starts before signing.