Changes to franchise standards: how to protect your budget

When you buy a franchise, you join a network whose shared standards help build brand recognition. Those standards evolve, however: a new fit-out, different software or compulsory equipment replacement may be introduced. For franchisees, this means potential costs after the outlet has opened. Before signing the agreement, check not only the current requirements, but also who can change them, through what process and at whose expense.

1. Establish which requirements can change

Investment obligations are not always set out in the main agreement. They may appear in the operations manual, brand identity guidelines, IT system rules or a technical appendix. Read any clause requiring you to comply with the “standards in force across the network” particularly carefully. Without further limits, such a clause makes it difficult to plan your future budget.

Ask for a list of all documents setting out the requirements for your outlet, together with their current versions. Then divide potential changes into three groups:

• organisational, such as changes to reporting or customer service procedures;
• technical, covering software, equipment and integrations;
• capital investment, such as refurbishment, new furniture or alterations to workstations.

Do not assume that organisational changes cost nothing. Extra reporting may take up staff time, while longer opening hours may require more staff. A new system, meanwhile, may involve not just implementation costs but also an ongoing subscription.

Ask for examples of changes introduced at existing outlets: what they involved, how they were announced and what franchisees paid. Speak to franchisees about whether the deadlines were realistic. The aim is not to secure a guarantee that the future will mirror the past, but to understand how decisions are made within the network.

2. Understand the legal limits on unilateral changes

Poland has no separate statute comprehensively regulating franchising. A franchise agreement is an “unnamed contract” — one not specifically defined as a contract type in legislation — entered into primarily under the principle of freedom of contract in Article 353¹ of the Polish Civil Code. That freedom is not unlimited: the terms and purpose of an agreement must not conflict with the law, the nature of the legal relationship or the principles of social coexistence.

The Civil Code’s general rules on performing contractual obligations and liability for breaches also apply, as do its rules on standard contract terms, depending on how the documentation is structured. Other aspects of the relationship are governed by, among other things, competition law, intellectual property law and tax legislation. The absence of a dedicated statute therefore does not mean there is no legal protection.

Nor is there a general, franchise-specific obligation to provide a statutory disclosure document 14 days before the agreement is signed. Such a requirement should not be inferred from draft legislation alone. Voluntary codes of good practice are not legislation; check whether the franchisor has adopted a particular code and what significance it has under your agreement.

Simply calling a document a “manual” does not determine whether it can validly be used to change your obligations. A lawyer should assess the scope of the power to make changes, how new versions are delivered and how the manual relates to the agreement. Do not assume either that every update requires a signed amendment or that the franchisor can change everything unilaterally.

3. Negotiate a predictable framework for costs

Rather than demanding that standards be frozen entirely, propose rules that allow the brand to develop without imposing uncontrolled costs on your outlet. A healthy franchise network needs both consistency and financially stable franchisees.

The agreement should define:

• The scope of permitted changes: what can be updated operationally and what requires separate agreement.
• Reasons for changes: for example, legal requirements, safety or a specified update to the franchise concept.
• Notice periods: notice proportionate to the scale of the work and the availability of contractors.
• Cost information: an outline of the implementation, estimated costs and details of any new recurring fees.
• Allocation of costs: who pays for equipment, installation, training, data migration and downtime.
• A cost limit: a spending threshold or annual budget for changes, above which further consent or a financial contribution from the franchisor is required.

The limit needs a clear definition. Establish whether it covers amounts inclusive or exclusive of VAT, labour costs and successive phases of the same upgrade. Otherwise, several apparently minor updates could together exceed the agreed budget.

Discuss changes required by law or necessary for safety separately. These may need to be implemented more quickly, but communication and funding arrangements still need to be agreed. A decision simply to refresh the brand’s appearance should not automatically qualify for the same urgent treatment.

4. Test the framework against a specific scenario

Before signing, work through a simple test with the franchisor: the network announces an equipment replacement programme when your agreement is close to expiry. Must you invest even without a guarantee of renewal? Could the work be deferred, implemented in part or supported by a financial contribution?

A second scenario is an update to the point-of-sale system that requires the outlet to close. Check who schedules the work, who is responsible for transferring data and who bears the costs of system failures. Allow for the margin lost during downtime, as well as expenses that continue while the outlet is closed.

The answers should be reflected in the contractual documents, not just in sales correspondence. Also agree on a notification channel, an archive of previous versions of the standards and a procedure for raising objections. Do not assume that challenging a change automatically suspends your obligation to implement it — there must be an appropriate basis for that effect.

Practical takeaway: before buying a franchise, protect not only your opening budget but also the terms governing future upgrades. A clearly defined scope for changes, time to implement them and a predictable allocation of costs are worth more than a general promise that expenses will be reasonable.