Franchising in Portugal: organising online sales across your network

An online shop that works well for a business you run yourself can raise questions when the first franchisees join: who receives the order, who issues the invoice and who bears the cost of a return? Before expanding, put this process in order. Across a franchise network, the shopping experience should be consistent, but that does not remove each company's separate legal status or the need to identify the seller clearly.

1. Decide who sells through each channel

Start by mapping the journey of an order, from payment through to any refund. Simply deciding that the website belongs to the franchisor is not enough: ownership of the channel does not, in itself, determine who enters into the sales contract with the consumer.

Several arrangements are possible. The franchisor can sell directly and contract the local outlet to prepare or deliver the order. Alternatively, the central channel can route the order to a franchisee who will act as the seller. Franchisees may also have their own online shops, subject to legally compliant quality requirements.

For each arrangement, answer the following questions in writing:

• Which company is identified as the seller before the purchase?
• Who receives payment and issues the invoice?
• Who confirms availability and takes responsibility for delivery?
• Who handles complaints, returns and refunds?
• What payment does an outlet receive if it only prepares or delivers the order?

Avoid presenting one entity to the customer while treating another as the seller in your internal procedures. Have the process reviewed by legal and accounting advisers, including the payment flows between companies.

2. Turn the process into operational rules

Allocating every purchase to the nearest outlet may seem straightforward, but it can fail when that outlet has no stock, is closed or cannot meet the advertised delivery time. Set objective routing criteria and a fallback solution for rejected or incomplete orders.

Create an operational guide for each option: home delivery, in-store collection and online purchases returned in person. Each guide should identify who is responsible, the response deadline, stock movements and the financial settlement between the companies involved.

For example, if a customer buys from the franchisor and collects from a franchised outlet, clarify who holds the product until collection, how handover is recorded and what happens if the customer does not turn up. If the outlet accepts a return on the seller's behalf, specify who checks the item and who authorises and processes the refund.

Test the entire journey in a controlled live transaction, including a cancellation and a return. The aim is not just to confirm that the platform accepts payments: it is to check that everyone involved knows what to do without passing the problem on to the customer.

3. Comply with competition law and consumer rights

Portugal has no specific franchising law or compulsory register specifically for franchisors. Applicable legislation includes the Portuguese Civil Code, rules on standard contract terms, and Portuguese and EU competition law.

For online sales, particular attention should be paid to Regulation (EU) 2022/720 on certain categories of vertical agreements. Its application is subject to conditions and does not automatically make every digital rule within the network lawful. Preventing a franchisee from making effective use of the internet to sell may constitute a hardcore restriction under competition law. Restrictions on passive sales, including many unsolicited orders received online, also require particular care.

Quality requirements can be set for online presentation, but they must not act as a disguised ban. Seek specialist advice on any restrictions relating to sales channels, digital advertising or third-party platforms.

For distance sales to consumers, Portuguese Decree-Law No. 24/2014 sets out information requirements and, as a general rule, a 14-day right of withdrawal, subject to statutory exceptions. The conformity of goods is governed by Decree-Law No. 84/2021. Internal rules on sharing costs cannot reduce consumers' statutory rights.

4. Align the contract, platform and customer service

Before recruiting franchisees, align three elements: the contract between the companies, the information displayed on the platform and the instructions used by customer service teams. A promise that customers can return purchases to any shop requires a procedure and a cost-sharing arrangement that make it workable.

Also document who can create campaigns, change delivery terms and temporarily stop accepting orders. Specify how technical faults will be communicated and how payments, cancellations and refunds will be reconciled. Do not leave these decisions dependent on informal messages between teams.

Practical takeaway: before expanding, work through an online purchase from start to finish and simulate its refund. If you cannot identify the company responsible and the associated cost at every stage, the process still needs clarifying.