Franchising in Portugal: advertising your opportunity accurately

Turning an existing business into a franchise proposition also involves thinking about how you present the opportunity. An advert can create expectations that the business is not yet able to meet. Before promoting your brand to prospective franchisees, prepare communications that are verifiable, consistent with the agreement and grounded in the realities of the business. In the franchising community, trust starts before the first meeting.

1. Know the rules before you publish

Portugal has no specific franchising law, nor a dedicated regime requiring a franchise disclosure document to be provided within a fixed statutory timeframe. That does not mean you are free to advertise any benefit or omit essential conditions.

The general rules of the Portuguese Civil Code apply, including good faith in negotiations and pre-contractual liability. The Portuguese Advertising Code is also relevant, particularly its requirements concerning truthfulness and its prohibition of misleading advertising. A sales presentation is not exempt from these considerations simply because it circulates only among businesspeople.

The European Code of Ethics for Franchising states that advertising to recruit franchisees must not be ambiguous or misleading. It is not Portuguese legislation of universal application: it is a self-regulatory instrument, whose binding force stems from association membership or commitments undertaken. Nevertheless, it provides a useful benchmark for preparing responsible communications.

Working rule: every significant claim should be capable of being explained and substantiated before it reaches a prospective franchisee. A small-print disclaimer does not necessarily remedy a misleading headline message.

2. Separate the current position from expansion plans

A company may have a strong company-owned business while only just starting to franchise. It should make that position clear, rather than imply a track record as a franchise network that it does not yet have.

Pay particular attention to these expressions:

• “Nationwide network”: clarify the actual geographical presence, without confusing territories available for expansion with operating outlets.
• “Proven model”: identify what has actually been tested and in what context, without turning limited experience into a universal guarantee.
• “Ongoing support”: check that the team, communication channels and availability are sufficient to fulfil the promise.
• “Turnkey business”: explain which tasks are included and which remain the franchisee’s responsibility.
• “No experience necessary”: distinguish between not needing prior experience and not needing preparation, training or involvement in management.

Create an internal table with four columns: claim, available evidence, conditions under which it holds true, and person responsible for verification. If evidence is missing, or a condition substantially changes the meaning of the message, revise it before publication.

This exercise does not require you to disclose confidential information. It simply requires external communications to stay within what the company can demonstrate and deliver.

3. Make decision-changing conditions visible

An advert is not a substitute for contractual documentation. However, it should avoid creating a false impression of the nature of the opportunity or the commitment expected.

Present the franchisee as an independent business owner, responsible for their own operation and exposed to business risk. Do not advertise the proposition as a job, a guaranteed income or a passive investment if it requires active local management.

When mentioning included services, define their scope. For example, “support with opening” might mean advice, task coordination or carrying out work. These are different services. The wording should reflect the service actually envisaged, without leaving the prospective franchisee to guess.

Be careful about sales pressure based on urgency, too. Do not use “last chance” or “last available territory” without a current, documented basis. If a campaign includes time-limited terms, state them clearly and withdraw the message when they no longer apply.

The aim is not to put the entire agreement into an advert. It is to allow someone to decide whether to request further information without starting from a false assumption.

4. Keep all channels under control, including intermediaries

The same proposition may appear on the company website, listing portals, social media, in presentations and in messages from consultants. Without oversight, contradictory versions can emerge.

Before launch, establish a simple procedure:

1. Centralise approved content, recording the date and the person responsible for reviewing it.
2. Give intermediaries clear guidelines, prohibiting additional, unauthorised promises.
3. Compare the advert, presentation and agreement, looking for differences in the obligations and services described.
4. Keep copies of each version and supporting evidence, including the information that substantiates published claims.
5. Review campaigns when circumstances change, withdrawing outdated materials.

Ask someone unfamiliar with the project to explain what they understood from the proposition. If their interpretation is more favourable than what you are prepared to offer, the message needs revising. Seek appropriate advice on legally sensitive claims.

Practical conclusion: before advertising, bring together each promise, its supporting evidence and the corresponding contractual term. Publish only when all three are consistent.