Buying a franchise: read the manual before you sign

A franchise agreement may look straightforward, while most of the day-to-day obligations are set out in a manual. These might cover opening hours, your presence on site, quality checks and administrative tasks. Across a franchise network, such rules help maintain a consistent brand and business model. For you as a buyer, however, they also determine how much freedom you have and how much time and staffing your business will require. So read the manual as part of your due diligence, not simply as a reference guide for later.

1. Identify all the documents behind the agreement

A franchise manual describes how you must operate the franchise. It may take the form of an online portal, a collection of operating instructions or a series of separate guides. Its name matters less than the obligations it imposes.

Look through the draft agreement for references such as ‘operational guidelines’, ‘franchise standards’ and ‘protocols’. Note which document each reference points to. Then request the current version, including appendices and any documents referred to in the manual itself.

Create a simple document list covering:

• the name and version date of each document;
• the clause in the agreement that refers to it;
• whether the document imposes obligations or merely offers advice;
• the date you received it;
• any sections or documents still missing.

Check the order of precedence too. Which takes priority if the agreement recommends a particular practice but the manual makes it compulsory? An order-of-precedence clause can provide clarity, but it is better to resolve specific conflicts before signing. A verbal assurance that a requirement ‘is not applied that strictly in practice’ is not a reliable basis for your business plan.

2. Know what information you should receive in advance

In the Netherlands, the Franchise Act has been in force since 1 January 2021 and is incorporated into Book 7, Title 16 of the Dutch Civil Code. It sets out specific rules on the exchange of information before a franchise agreement is entered into.

Among other things, the franchisor must provide the draft agreement and its appendices. They must also supply information about fees, investments and other financial contributions required from you. In addition, they must disclose other information that they know, or can reasonably be expected to suspect, is important to your decision.

This does not mean that the entire manual must automatically be made publicly available in every case. It often contains confidential know-how. However, if the agreement binds you to requirements in the manual, you need sufficient insight into the obligations you are accepting before making your decision. Being told that the manual will only become available after signing is therefore a significant warning sign.

The information required by law must be provided at least four weeks before the franchise agreement is entered into. If essential appendices are missing, or relevant obligations only emerge later, seek advice on what this means for the disclosure requirements and the start of that period.

You also have a duty to investigate: within reasonable limits, you must take steps to ensure you can make an informed decision. Ask focused questions and keep the answers. Signing an acknowledgement of receipt when you have not seen the documents listed is inconsistent with that duty.

3. Translate the requirements into a typical working week

Reviewing a manual means more than checking whether its rules are clear. You need to establish whether they are workable at your premises and compatible with the way you want to run a business.

Draw up a trial rota for a typical week. Include not only customer-facing work but also mandatory checks, reports, cleaning rounds, ordering and meetings. Then check who is allowed to carry out these tasks and what training or authorisation they need.

Pay particular attention to:

• Your presence on site: must you be personally present at set times, or can a manager stand in for you?
• Opening hours: do the required hours fit your staffing plans and what is possible at the premises?
• Administration: what information must you submit, how often and through which systems?
• Quality checks: how are assessments carried out, and how quickly must you remedy any shortcomings?
• Cover: what rules apply if you are ill or temporarily unable to work?

Calculate the hours needed for labour-intensive requirements. A daily check may seem minor on its own, but alongside other obligations it could create an ongoing need for extra staff. Base your budget on the prescribed way of running the business, not on a more flexible approach that the franchise does not allow.

4. Record exceptions and clarify uncertainties in writing

Discuss your findings with the franchisor before making a final commitment. Distinguish between requests for clarification and actual departures from the rules. Clarification explains an existing rule; an exception gives you permission to do something different.

If your outlet needs different opening hours, for example, record which hours apply, for how long and under what conditions. Ask an authorised representative to confirm this and have the arrangement included in the agreement or a clearly worded appendix. Check that a general reference to the manual does not undermine the exception.

Also retain the versions of all documents you reviewed, preferably as dated files. An online portal that changes without keeping a version history makes it difficult to establish later which requirements you examined before signing.

Practical conclusion: only sign once you understand the binding operating instructions, have calculated their impact on your working week and have recorded any necessary exceptions in writing.