Buying a franchise: what information to request before signing

Before joining a franchise network, you need more than a brand presentation and a draft agreement. You need a structured information pack that allows you to check what you are actually buying and which obligations you are taking on. As Slovenia has no specific, legally prescribed franchise disclosure document, prospective franchisees should establish a clear process themselves: what they need to receive, who will review it and when they will be ready to make a decision.

1. Understand what the law requires — and what it does not

Slovenia has no dedicated franchise law, compulsory franchise register or specific, legally prescribed document listing the information a franchisor must provide to a prospective franchisee before signing. A franchise agreement is an innominate contract — one not specifically defined as a separate contract type in law — governed by the general rules of the Slovenian Obligations Code (OZ).

This does not mean negotiations are free of legal rules. The principles of good faith and fair dealing, along with the rules on liability during negotiations, are important. Misleading statements or the failure to disclose material circumstances can have legal consequences, although each case must be assessed on its own facts. The absence of a prescribed disclosure form is therefore not a licence to present an offer dishonestly.

Depending on the nature of the arrangement, competition law, industrial property rules and sector-specific regulations may also apply. The Companies Act (ZGD-1) is relevant to companies’ legal status and who is authorised to represent them. None of these rules, however, replaces your own due diligence.

Nor should you assume that you automatically have a special franchise cooling-off period or a right to withdraw without giving a reason. It is sensible to agree expressly on time for review and any additional withdrawal rights. You will normally be buying a franchise for business purposes, so do not rely on consumer cancellation rights.

2. Request a consolidated information pack

Send the franchisor a written request for documents before making any binding commitment. The aim is not to collect as many files as possible, but to build a sufficiently complete picture of the offer. The pack should include at least:

• the full draft agreement, with all schedules and documents it refers to;
• a breakdown of initial and ongoing fees, together with other mandatory expenditure;
• a description of the business model, the franchisee’s responsibilities and the conditions for starting operations;
• access to the sections of the operations manual that set out significant business obligations;
• details of the contracting party and an explanation of its role within the franchise network;
• supporting evidence for material factual claims made in the sales presentation.

For each item, record whether you have received a document, only a verbal explanation or nothing at all. This will help you distinguish the offer you have actually reviewed from the expectations you have formed during discussions.

Ask specifically which documents are not yet final. If a price list or schedule is still being prepared, request an expected completion date. A draft with unresolved items is not equivalent to an offer where all your obligations are known.

To protect trade secrets, the franchisor may propose controlled access to the operations manual. Agree on an arrangement that also allows your adviser to carry out a meaningful review. Do not accept significant obligations simply on the basis that you will learn about them after signing.

3. Organise your questions, evidence and review time

Create a simple log with columns for the question, the answer received, supporting evidence, any outstanding issue and the person responsible. For example, if the presentation states that a particular service is included in the initial franchise fee, record where its scope is defined in writing. If there is no supporting evidence, treat the claim as unverified rather than as a guaranteed entitlement.

Send questions in batches and ask for written answers. After a meeting, send a brief summary and request confirmation or corrections. Keep a record of the date, document version and related correspondence. This will make it easier to identify what has changed during negotiations.

The period for making your decision should start only once you have received the complete agreed information pack. This is a suggested contractual arrangement, not a specific statutory time limit. Allow enough time for the complexity of the offer and for your lawyer and accounting adviser to review it.

If you receive a new version of the agreement or a revised price list just before signing, ask for the changes to be marked and for additional review time. Pressure over a supposedly last available location is no reason to skip due diligence.

4. Turn outstanding questions into decision criteria

Before making your final decision, divide missing information into three categories: essential before signing, important for negotiations and useful for running the business later. Do not finalise your decision without information that materially affects the scale of your investment or the obligations you will assume.

Give your lawyer the offers, presentations and written answers as well as the agreement. This will allow them to check whether the final wording adequately reflects important explanations you have received. A promise in an email is not always equivalent to a clearly agreed contractual obligation.

Refusal to meet an individual request does not, in itself, prove dishonesty. What matters is whether the franchisor explains the reason and offers a useful alternative way to verify the information. Repeatedly avoiding essential questions, however, is a strong reason to walk away.

Practical takeaway: before signing, request a complete information pack, document the answers and secure enough time for an independent review. Do not let confidence in a well-known brand stand in for missing information.