Franchise information pack: what to disclose before signing

The owner of an established business knows its limitations, seasonal patterns and day-to-day demands. A prospective franchisee usually sees only part of that picture. Before inviting them to join your franchise network, prepare an information pack that allows them to make an informed assessment of the relationship. This is not another sales brochure, but a structured account of the facts, obligations and risks that the candidate can review with an adviser at their own pace.

1. Distinguish legal requirements from voluntary standards

In Poland, a franchise agreement remains an ‘unnamed contract’: a type of agreement not specifically regulated as a distinct category under the Civil Code. There is no separate franchise act imposing a general duty to provide a disclosure document with prescribed contents, nor a specific statutory deadline for delivering it. There is also no separate public register of franchise networks. Business registration and requirements for particular business activities are separate matters.

The relationship is governed primarily by the Polish Civil Code, including the principle of freedom of contract under Article 353¹. That freedom has limits: the terms and purpose of the agreement must not conflict with legislation, the nature of the legal relationship or the principles of social coexistence. Rules on negotiations, defects in declarations of intent and liability for damages also matter. Depending on the circumstances, the Act on Combating Unfair Competition, the Act on Competition and Consumer Protection and the Industrial Property Law may also apply.

The absence of a statutory disclosure form does not give you free rein in how you present the franchise relationship. Misleading information or negotiating contrary to good commercial practice may have legal consequences; the assessment will depend on the circumstances.

Another point of reference is Poland’s Franchise Code (Kodeks Franczyzy), a voluntary self-regulatory standard rather than legislation. It provides for candidates to receive reliable information about the franchise system and the material terms of the relationship. If you state that you follow it, check that your procedures meet the commitments you have adopted. Do not present draft legislation or disclosure deadlines from other countries as current Polish law.

2. Prepare a document for scrutiny, not a sales presentation

The pack should answer the question: ‘What is the candidate actually committing to?’ A main document with an organised list of appendices is usually the best approach. Each item should carry a date and version number.

In particular, include:

• Identity of the contracting party: details of the business entering into the agreement, with an explanation of the role of any other entities that will provide services or collect fees.
• The system’s track record: the history of your own operations, the extent of any testing, and a clear distinction between company-owned and franchised outlets. If you are only just building your franchise network, say so explicitly.
• Brand rights: who holds the trade mark rights and on what basis the candidate will be entitled to use the mark. Distinguish a trade mark application from a registered right.
• Financial commitments and dependencies: required investment, types of fees, compulsory purchases, IT systems and obligations to third parties.
• The scope and limits of the relationship: the support provided, the personal involvement required, the agreement’s duration, arrangements for ending it and the main restrictions on the franchisee’s independence.

Include the draft agreement and the documents that will define the franchisee’s obligations. A table of contents for the operations manual is not enough if it conceals significant investment or organisational requirements. Confidentiality can be protected separately, rather than postponing disclosure of material obligations until after the agreement has been signed.

3. Explain the limits of your knowledge and identify your data sources

The biggest mistake is not always an inaccurate figure. Sometimes it is an accurate figure presented without context. The performance of an established company-owned outlet does not automatically reflect the circumstances of a new franchisee in another city.

For financial data, state the period covered, the type of outlet and the costs included. Separate historical data from estimates and assumptions that need local verification. Do not present a forecast as a guaranteed outcome. If you have no experience of an outlet run by an independent franchisee, clearly flag that gap.

It is worth adding a short table with the headings: ‘information — source — date updated — limitations’. This can make it clear, for example, that an equipment quotation is current but the cost of fitting out the premises remains an estimate. The candidate should know which figures they need to verify themselves before making commitments.

Also describe material risks specific to the model, such as reliance on a particular supplier, limited experience outside the city where the business currently operates, or the need to manage the outlet personally. This does not replace the candidate’s own assessment, but it gives them an honest starting point.

4. Set procedures for delivery, questions and updates

Appoint someone to take responsibility for the completeness of the pack. Before sending it, cross-check the main document, draft agreement and appendices. Any discrepancy concerning fees, support or exit arrangements should be resolved, not left for the candidate to interpret.

Adopt an internal policy of providing documents sufficiently far in advance to allow a meaningful review, preferably before any binding decision or substantial payment. This is a recommended procedure, not a specific statutory deadline. Give candidates the opportunity to consult a solicitor or other legal adviser and an accountant, and to ask questions without pressure to sign immediately.

Keep proof of delivery of the specific version, together with its list of appendices. Maintain a record of questions and answers. If important terms change, provide an update explaining the changes and allow time for reassessment. A signed acknowledgement stating ‘I have read this’ does not remedy incomplete or misleading information.

Practical takeaway: before entering into your first franchise agreement, create a single, version-controlled pack, check that it is consistent with the documents governing the relationship, and test it on someone unfamiliar with the business. If they cannot identify the obligations, costs and main risks, the pack needs improvement.