Franchising in Portugal: handling customer complaints

Before turning an existing business into a franchise network, you need to decide how to respond when a customer complains. Consumers recognise the brand, but may be dealing with a different company at each outlet. A shared procedure should protect the customer experience without blurring that legal distinction. Preparing it before expansion helps prevent contradictory responses, unauthorised promises and disputes over who pays for a remedy.

1. Identify who is accountable to the customer

Start by mapping how a complaint moves through your existing business: where it comes in, who receives it, who checks the facts and who decides on the response. Then adapt that process for outlets run by independent businesses.

In each case, identify the entity that sold the product or provided the service. The invoice, contractual terms and information supplied to the consumer should make that entity identifiable. Simply displaying the brand’s trading name at every point of contact is not enough.

Prepare a simple matrix to distinguish between:

• Complaints about a sale made and invoiced by the franchisee;
• Problems relating to a campaign developed by the franchisor;
• Defects in products or materials supplied by shared suppliers;
• Situations involving several outlets or posing safety risks.

The matrix is there to direct each case to the right party, not to avoid legal responsibilities. A clause between franchisor and franchisee cannot remove consumer rights or, by itself, determine who is liable to the consumer.

2. Separate legal requirements from brand standards

Portugal has no specific franchise law and no dedicated registration or mandatory pre-contractual disclosure regime for franchise agreements. Applicable rules include the general provisions of the Portuguese Civil Code, including good faith in negotiating and performing contracts, and the rules governing standard contract terms where pre-drafted terms are used.

In dealings with customers, the absence of franchise-specific legislation does not remove the obligation to comply with consumer protection rules. Law No. 24/96 sets out the consumer protection framework. Decree-Law No. 156/2005, as amended, governs the Livro de Reclamações, Portugal’s statutory complaints book. You must check the obligations applicable to the activity and premises, including making the complaints book available and processing and forwarding complaints.

An internal form or a brand email inbox does not replace the Livro de Reclamações where it is mandatory. Nor should either create barriers to accessing it.

Set out three categories in writing: legal obligations, commitments made to the customer and discretionary goodwill gestures. This distinction prevents a legal entitlement from being presented as an exceptional offer. Internal response deadlines must not compromise compliance with the statutory deadlines applicable to each procedure.

3. Create a shared process with clear decision-making responsibilities

The operating procedure should enable a team to resolve a complaint without constantly relying on the founder. Organise it into five steps:

1. Record: collect the reason for the complaint, the date, the outlet and the details needed to trace the transaction.
2. Acknowledge: explain who is handling the case and when the customer can expect the next contact.
3. Investigate: review documents and hear from those involved without jumping to conclusions.
4. Decide: provide the remedy required by law or consider an authorised goodwill offer.
5. Close: communicate the decision and retain an appropriate record of how the complaint was handled.

Define which decisions the outlet can make independently and which require central support. Establish an urgent escalation route for suspected health or safety risks, separate from the normal process.

If customer service is centralised, explain to the customer which entity is responsible for handling the complaint. Share only the personal data needed, with access controls and retention arrangements that comply with the General Data Protection Regulation. Centralisation does not justify making every customer’s full history available to the entire network.

4. Agree on costs and test before expanding

The agreement should clarify how central support operates and how costs associated with returns, repairs or compensation are handled, where applicable. Set out how the source of a problem will be established and how a joint decision will be documented. Avoid an automatic rule that whoever receives the complaint always pays.

Test the procedure within the existing business using simulated scenarios: a disputed service, an ambiguous campaign and a recurring product defect. Check whether the team identifies the entity that contracted with the customer, finds the correct guidance and knows when to ask for help.

Then analyse recurring causes, not just the number of complaints. An outlet that records everything may be performing better than one that conceals problems. Use the findings to improve instructions, training or marketing communications.

Practical conclusion: before bringing in your first franchisee, define who is responsible for each type of case, how decisions are made and how costs are shared. A franchise network builds trust when it responds consistently, respects customer rights and learns from its mistakes.