Data sharing in franchise networks: principles for safe reporting

Before sharing your own business’s performance figures with your first franchisee, decide which information should actually circulate between outlets. A franchise network is a group of independent businesses, not a single enterprise. Data that head office needs to support a partner should not necessarily be shared with everyone else. Well-designed reporting helps an established business grow without creating unnecessary legal risks or undermining trust.

1. Start with the purpose, not unrestricted access

Within your own business, you may have access to every transaction, cost and sales plan. When moving to a franchise model, do not automatically extend that approach to relationships with independent partners. First, list the decisions for which head office needs data: planning training, identifying stock shortages, assessing staff workloads or calculating payments for services provided under the agreement.

For each report, set out:

• the specific purpose of collecting the information;
• the scope of the data and how often it must be submitted;
• who is authorised to access it;
• how long it will be retained;
• how the results will be used and shared further.

Separate data submitted to head office from data shown to the whole network. A detailed report on an individual outlet may be justified when providing tailored operational support, but may not be needed at a meeting of all franchisees.

For example, to plan training on stock losses, head office may need to know the volume and types of losses. That does not mean other partners need access to a particular business’s full purchase invoices, margins and future orders. Every field in a reporting form should have a clear justification: the technical ability to collect it is not enough.

2. Take account of competition law and partners’ independence

Poland has no separate act comprehensively regulating franchising. A franchise agreement remains an unnamed contract — one not defined as a specific contract type in legislation — based, among other things, on the principle of freedom of contract under Article 353¹ of the Polish Civil Code. This does not, however, give businesses unrestricted freedom to organise information flows. Relevant legislation includes Poland’s Act on Competition and Consumer Protection, its Act on Combating Unfair Competition and, where the conditions for its application are met, Article 101 of the Treaty on the Functioning of the European Union.

Membership of a franchise network does not in itself exempt businesses from competition law. Information sharing can be problematic if it reduces uncertainty about competitors’ future behaviour and makes coordination easier. This also applies where data passes through head office rather than directly between partners.

Particular care is needed with business-specific information about future prices, planned promotions, margins, intended sales volumes and local strategic plans. Sharing such data is not automatically prohibited in every case, but its purpose, necessity and effects require assessment.

If you operate company-owned outlets alongside franchised ones, also consider whether the people managing those outlets should have access to partners’ detailed data. Head office may both organise cooperation and compete in the local market. A franchisee’s contractual consent does not, on its own, remove the risk of breaching competition law.

3. Design comparisons that help without revealing strategies

Comparing performance helps identify areas for improvement. It is safer to start with operational indicators relating to process quality, such as service times or stock loss levels, rather than partners’ detailed commercial plans. Here too, the scope of the data should match a genuine need.

Prepare a shared glossary of indicators. Explain whether service time includes the customer’s wait, how returns are accounted for and when a stock loss is included in a report. Without consistent definitions, a comparison may lead a partner to make poor decisions, even if the calculations themselves are correct.

For network-wide reports, consider historical data, performance ranges and aggregated results. Remember, however, that removing an outlet’s name does not guarantee anonymity. In a small group, recipients may be able to identify a business from its location, the size of its premises or its distinctive product range.

There is no universal number of outlets or single reporting time lag that automatically makes data sharing lawful. If the comparison group is too small, do not publish the results, or show each partner only their own performance trend. Reporting should support operational improvement, not allow businesses to reconstruct someone else’s strategy.

4. Document the rules and test them in practice

Before entering into your first franchise agreement, prepare a reporting schedule to accompany it. This should define both parties’ obligations, permitted purposes for using data, access and confidentiality rules, and what happens when the relationship ends. Do not base the entire system on a general clause allowing head office to request any information it wishes.

The document should also explain how errors are corrected and how new reports can be introduced. Franchisees need to know who is responsible for resolving discrepancies and whether the data has already been used in a benchmarking report. If a report contains personal data, assess the obligations under the General Data Protection Regulation (GDPR) separately.

Test the information flow using your company-owned outlets: prepare a report, assign access roles and check what each recipient can actually see. Apply the rules to meetings, messaging apps and email as well. Restricting access to a system achieves little if a detailed report is later sent to a group chat.

Practical takeaway: before sharing the first report, establish its purpose, recipients and the minimum data required. Keep detailed information where it is needed, and focus network-wide sharing on insights that help partners improve their operations.