Customer complaints in a franchise: who is responsible to the customer in Slovenia?

Customers see a shared brand at an outlet, but their receipt may be issued by an independent franchisee. If goods do not conform to the contract or a service is not performed properly, that distinction quickly becomes important. Before expanding an existing business into a franchise network, put a complaints-handling process in place. This must cover not just a courteous response, but also responsibility to the customer, staff authority and the allocation of costs between the contracting partners.

1. First establish who the customer is contracting with

For each sales channel, record which business acts as the seller or service provider. For an in-store purchase, this may be the franchisee; for an order through a shared online shop, it may be the franchisor or another clearly identified business. The collection point alone does not establish who the customer's contracting party is.

Prepare a simple overview covering the following for each channel:

• the business that enters into the contract with the customer;
• the business that issues the receipt or invoice and receives payment;
• the contact for submitting a complaint;
• the person authorised to decide on the claim;
• the process for issuing a refund or providing another remedy.

If these roles are split between businesses, the arrangements must be clear both legally and operationally. Also check that the seller's details are consistent across the offer, terms and conditions, order confirmation and receipt or invoice. Shared branding must not obscure the identity of the business the customer is dealing with.

Give separate consideration to online orders collected from a franchise outlet. Staff must know whether the outlet handles the complaint itself or simply accepts it and forwards it to the seller responsible. Do not promise customers a remedy that the outlet has no authority to provide.

2. Distinguish legal liability from internal arrangements

Slovenia has no specific franchising legislation. A franchise agreement is an innominate contract — one not specifically defined in law — governed by the general rules of the Slovenian Obligations Code (OZ). The relationship between franchisor and franchisee is generally a business-to-business relationship, not a consumer relationship.

Sales to consumers, however, are subject to Slovenia's Consumer Protection Act (ZVPot-1). Where goods do not conform to the contract, consumers generally exercise their rights against the seller. A guarantee is a separate legal mechanism, and the guarantor's obligations must also be taken into account. Where a service has been performed improperly, the identity of the contractual service provider matters. A blanket rule that ‘head office handles everything’ therefore cannot be applied without checking the actual roles involved.

A franchise agreement can allocate costs between the partners, but it cannot take away consumers' statutory rights. If the franchisee is liable to the customer as the seller, an internal agreement that the franchisor covers supplier defects does not, in itself, relieve the franchisee of that liability.

Before opening, have a legal professional review the process in light of your goods, services and sales channels. In particular, distinguish between statutory claims for goods that do not conform to the contract, guarantee claims, withdrawal from distance contracts and a voluntary exchange policy. These do not necessarily have the same conditions or time limits.

3. Set out financial responsibilities in the contract and decision-making in the procedure

The most common operational question is not who will apologise to the customer, but who can authorise a remedy and who will pay for it. Settle this before bringing your first franchisee on board.

The contractual arrangements should allocate costs according to the cause: defective goods supplied, improper storage, incorrect performance of a service or an additional promise made by an individual outlet. Specify what evidence the partners need to settle costs between them, who pays for transport and how the cost is recorded. Internal investigations into the cause must not lead to unjustified delays in meeting obligations to the consumer.

The operating procedure should answer four questions for staff:

1. What information and evidence should I record when a complaint is submitted?
2. What can I resolve myself, and when should I involve the person responsible?
3. Who monitors the applicable deadlines and keeps the customer informed?
4. How should I record the decision and close the case?

Set out any voluntary benefits separately. If you advertise exchanges at any outlet in the network, also establish how costs will be settled between outlets. Otherwise, one outlet may bear the cost of a promise while another received the revenue.

4. Test the complaints process before opening

Test the procedure using hypothetical cases at an existing outlet. Include at least an in-store purchase, an online order collected from a franchisee and a claim where the cause of the problem is not immediately clear.

Observe whether staff correctly identify the seller, find the person responsible and explain the next step clearly to the customer. Also check that the accounts team can process the agreed refund and settle costs internally. The test is not successful if the case is resolved only because the founder intervenes personally.

Where complaints recur, the person responsible should investigate the cause and propose a change to the procedure. This turns a complaint into useful information for the whole franchise network, rather than merely a cost for one outlet.

Practical takeaway: before launching your first franchise, prepare an overview of sellers by sales channel, a written allocation of costs and a tested complaints-handling procedure. Customers must know whom to contact, and the partners must know who takes action and who pays.