Buying a franchise: licences and requirements for opening in Portugal

A brand may approve a unit’s location and design before all the legal requirements for opening have been met. In franchising, support from the network is no substitute for checking the formalities that apply to the business and its premises. Before buying, confirm what is required, who will handle each procedure and what happens to your investment if you cannot open.

1. Separate brand approval from legal requirements

Portugal has no specific franchise law or mandatory public register of franchisors dedicated to this business model. Nor does it require a franchise-specific pre-contractual disclosure document with legally prescribed content. This does not remove the obligation to comply with general rules: the Portuguese Civil Code provides for freedom of contract and requires good faith in negotiations and in the performance of the contract, notably under Articles 405, 227 and 762.

The formalities for operating the premises depend on the particular activity. A restaurant, a home care service and a shop will not necessarily follow the same process. Municipal requirements, prior notifications, authorisations or other procedures involving the relevant authorities may apply.

For various retail, service and food service activities, the Legal Framework for Access to and Pursuit of Trade, Services and Food Service Activities, approved by Decree-Law No. 10/2015, as amended, is relevant. The applicable procedure must be confirmed for each case: not every business needs a traditional licence, and a simple prior notification does not remove the obligation to meet the underlying requirements.

The European Code of Ethics for Franchising is a self-regulatory instrument, not an administrative licence or a substitute for Portuguese law.

2. Check the actual activities and the chosen premises

Start by describing everything the unit will do, rather than relying solely on the concept’s trading name. Preparing food is not the same as selling packaged products; providing certain types of care is not equivalent to offering a wellness space. Additional activities may change the requirements.

Ask the franchisor for an operational description and a list of the formalities usually required. Then check that list with the local council, the relevant authorities and suitably qualified professionals, depending on the activity. A checklist used by another unit is a reference point, not a guarantee.

Organise your checks into four groups:

• Use of the property: planning and building documentation, and whether the permitted use is compatible with the intended activity.
• Building works and installations: procedures applicable to the proposed works, accessibility, fire safety and relevant technical requirements.
• Operation: notifications, authorisations, professional qualifications or registrations required for the services actually provided.
• Additional features: outdoor seating, external advertising, background music or use of public space, where applicable.

If the premises previously housed a similar business, do not assume that everything remains valid. Check the implications of a change of operator, building works and changes to how the business operates. Keep supporting documents and written responses, clearly identifying the unit to which they relate.

3. Allocate tasks and costs before making commitments

The phrase ‘support with opening’ is not enough to establish who will prepare a design, submit a notification or respond to a request for clarification. Turn that promise into a responsibility matrix attached to the contract or agreed in writing.

For each task, record who is responsible for preparation, who will submit the application, the documents required, the expected cost and any dependencies. Distinguish between the work of the franchisor, the franchisee and external professionals. The contractual allocation of tasks does not remove the legal responsibilities of the business operator.

Ask for quotations that separate administrative fees, professional fees, design work and physical alterations. Also confirm whether the network charges for additional support if the process takes longer or requires revisions.

Example: the brand may provide a standard shop layout, but that layout may need adapting to the building. You need to know who will appoint the relevant professional, who will pay for the changes and whether the network must approve the revised solution. Resolve these questions before commissioning building works or ordering equipment that depends on the design.

4. Protect your timetable and payments in the contract

Build the opening timetable around technical and administrative checks, not just the desired commercial launch date. Identify the procedures that must be completed before building works, installations and trading can begin, without treating estimates as guaranteed timescales.

With legal advice, negotiate how three situations will be handled: administrative delays, the need for additional investment and an inability to open. The contract should clarify whether deadlines can be extended, obligations suspended or the agreement terminated, and what happens to any money already paid.

Consider making certain commitments conditional on confirmation that the business can legally operate from the premises. Specify the evidence required, deadlines and consequences; a vague reference to ‘obtaining licences’ may not cover every necessary procedure. Also confirm when recurring charges begin, particularly if they may fall due before opening.

Practical conclusion: before signing, put together a verified checklist of formalities, a responsibility matrix and written provisions covering delays or an inability to open. Brand approval is only one part of preparing to open legally.