Sharing turnover data with your first franchisee

When you turn an existing business into a franchise model, your sales figures become part of a partnership between independent business owners. A till system that gives you enough insight will not automatically offer your first franchisee the same clarity. Before launch, agree which turnover data will be available, how it will be calculated and who will correct errors. Transparent information helps everyone in your franchise network work from the same facts.

1. Make information sharing a clear commitment

In the Netherlands, the Franchise Act has been in force since 1 January 2021 and forms part of Book 7 of the Dutch Civil Code. It requires franchisors to provide information about the relationship before entering into a franchise agreement. This includes how, how often and to what extent the franchisee will have access to turnover-related data relevant to running their business.

This goes beyond simply handing over historical figures for an outlet beforehand. You must also explain how information will be shared throughout the relationship. A general promise such as ‘you will have access through our system’ leaves too many questions unanswered.

Set out in advance:

• which data the franchisee can view and download;
• how up to date that data is;
• which sales channels and transactions it covers;
• what limitations the system has;
• who handles queries about discrepancies.

This explanation forms part of the information you must provide before signing. Allow for the statutory period of at least four weeks before entering into the franchise agreement. Ask a lawyer specialising in Dutch franchise law to check that your arrangements and disclosures comply with the legislation. A software demonstration is no substitute for a clear written explanation.

2. Agree what you mean by turnover first

With a single company-owned outlet, you can often explain an unclear figure from memory. That no longer works when an independent franchisee is involved. The same report can produce different interpretations if one person reads amounts as including VAT while the other calculates them excluding VAT.

Create a short glossary for all reports. For example, specify how you treat discounts, returns, cancelled orders, gift vouchers and sales through third-party platforms. Distinguish between the date of sale and the date payment is received.

Consider this practical example: a customer orders through a central sales channel, collects the product from the franchise outlet and later receives a partial refund. Without agreed rules, the original sale may appear in one report while the refund appears only in another. Two accurate reports can then seem to contradict each other.

For situations like this, explain where the transaction will appear and how adjustments will be reflected. Agree the accounting treatment with your accountant. If turnover also forms the basis for a franchise fee, the reporting definition must align with the calculation set out in the contract. This is not about the size of the fee, but about having a basis that can be checked.

3. Design access around the independent business owner

Start with what the franchisee needs, rather than everything your software can do. They must be able to monitor their own business and discuss the figures with a bookkeeper or adviser. A single total on a screen is often not enough.

Create an access matrix: a simple overview of users, data and permissions. Specify who can view, download or correct figures. Keep the franchisee’s access separate from that of employees and franchise support staff.

Also set out what happens during an outage, a change of system or the end of the relationship. Can the business owner export their own records in good time? Who retains which data? And who pays for essential access or additional reports? Make any costs clear in advance.

Turnover information does not always need to include personal data. Where customer details are unnecessary, share aggregate figures wherever possible. If reports contain data that can identify customers or staff, the EU General Data Protection Regulation (GDPR), known in the Netherlands as the AVG, also applies. In that case, establish the relevant data protection roles and access rights; do not automatically assume that the franchisor is the data processor for every flow of data.

4. Test reporting before your first franchisee joins

Use your existing business to test how information sharing works in practice. Ask someone who does not work with your records every day to read a report and compare it with the underlying transactions. Can they explain independently how the total is made up?

Test not only ordinary sales, but also a return, a discount, an online order and an adjustment made after the month-end close. Check that exported data produces the same results as the on-screen figures and that subsequent changes remain identifiable.

Then draw up a short procedure for handling discrepancies. It should identify the point of contact, the supporting evidence required and how corrections are recorded. Agree a realistic response time and prevent multiple versions of the same report from remaining in circulation.

Key takeaway: first establish which turnover information your franchisee needs, document the definitions and access arrangements, then test the system. Only promise visibility you can actually provide from the first day of trading.