The European Code of Ethics Before Launching Your First Franchise in Slovenia

When preparing an existing business for franchise expansion, a legally reviewed agreement does not answer every question about responsible working relationships. The European Code of Ethics for Franchising is a self-regulatory framework that helps shape relationships within a franchise network. Before making your first offer to prospective franchisees, it is worth checking what you will voluntarily commit to, how you will deliver on those commitments and what evidence will support your claims.

1. Distinguish between the law, the code and membership

Slovenia has no specific franchising act, compulsory franchise register or specific statutory disclosure document. A franchise agreement is an innominate contract — one without its own expressly defined statutory category — which may combine elements of licensing, sales, distribution and other contractual relationships.

Negotiations and contractual relationships are governed by the Slovenian Obligations Code (OZ), including the principle of good faith and fair dealing and the rules on liability during negotiations. Businesses must also comply with competition law, the Companies Act (ZGD-1) when running a company, the Industrial Property Act (ZIL-1) in relation to trade marks, and the Trade Secrets Act (ZPosS) when protecting confidential know-how. The code does not replace these rules.

The European Code of Ethics for Franchising is not Slovenian law. Its significance for an individual business also depends on the membership and contractual commitments that business has accepted. If you expressly refer to it in an agreement, ask a lawyer to check the scope and implications of that reference.

You should also distinguish between association membership and government approval. Membership is not official authorisation to expand through franchising, and a company's entry in the business register does not certify the quality of its franchise offering.

2. Check the requirements before including membership in your plans

The rules of the Slovenian Franchise Companies Section within the Slovenian Chamber of Commerce (Trgovinska zbornica Slovenije), approved in January 2015, explicitly link membership to ethical commitments and documentation. Among other requirements, full membership requires membership of the chamber and at least one year of franchise operations in Slovenia.

The rules also provide for a declaration accepting the European Code of Ethics for Franchising, a declaration that the franchise agreement complies with the code and Slovenian legislation, and a declaration that pre-contractual information is available to the franchisee. The listed supporting documents include proof of company registration, documentation relating to the name or the licence to use it, and a contents page or summary of the franchise manual.

This matters for entrepreneurs preparing their first franchise: running a company-owned outlet for many years is not necessarily the same as completing the required period of franchise operations. Before planning an application, check the current requirements, the evidence required and the available membership options with the section.

You can, however, start putting ethical business practices in place straight away. There is no need to wait for membership before establishing clear commitments, traceable documentation and an honest approach to communicating with prospective franchisees.

3. Turn ethical commitments into verifiable actions

The weakest approach is a general statement that ‘we operate ethically’, with no named person or procedure responsible for making that happen. A more useful tool is an internal table linking each commitment to an action, supporting evidence and responsibility.

Use four columns:

• Commitment: what exactly you tell prospective or existing franchisees.
• Implementation: which procedure ensures that the promise is kept.
• Evidence: where you keep the record, certificate or other supporting material.
• Responsibility: who checks implementation and addresses any shortcomings.

For example, if you describe your business model as proven, record which outlets and operating periods support that description. If you promise to transfer know-how, specify the materials and practical training this includes. If you emphasise ongoing collaboration, define how a franchisee can suggest an improvement and who will respond.

These are recommended internal measures, not new legal formalities. Their purpose is to prevent sales presentations from creating expectations that the business cannot meet in its day-to-day operations.

Before making your first offer, have the operations manager, the person responsible for franchisee recruitment and your legal adviser review the table together. This ensures that ethical commitments do not remain solely a marketing responsibility.

4. Monitor public claims and repeat your checks

Use only verifiable descriptions of your status on your website, in presentations and in conversations. Submitting an application does not make you a member. Adopting the code does not automatically mean that your business model has been independently assessed. Nor does membership alone demonstrate that every outlet is successful.

Before publishing any claim, check:

• Do we have evidence that the claim is currently valid?
• Are we describing membership, our own commitment or an assessment that has actually been carried out?
• Could a prospective franchisee interpret the wording as an earnings guarantee or government approval?
• Do we have permission to use any association logo?

Then schedule regular internal reviews, with additional checks whenever the offering changes significantly. When you introduce a new service, change the support provided or expand the network, reassess whether your public promises still reflect how the business actually operates. If you find a discrepancy, correct both the procedure and the promotional wording; changing only one side will not resolve the problem.

Practical takeaway: before launching your first franchise, prepare a one-page overview of your ethical commitments, naming the people responsible and listing the supporting evidence. Treat membership as a separate matter, and legal compliance as an essential foundation that no code can replace.