Planning Dispute Resolution Before Your First Franchise in Slovenia

When expanding an existing business into a franchise network, it is not enough to set out how the relationship will work when everything goes to plan. You also need to agree what happens when the parties interpret an invoice, promised support or a contractual obligation differently. A dispute resolution procedure prepared in advance reduces uncertainty and allows you to address disagreements before they threaten day-to-day operations.

1. Base the procedure on the contract, not improvisation

Slovenia has no dedicated franchise law, compulsory franchise register or specific statutory franchise disclosure document. A franchise agreement is an innominate contract: one that combines various contractual elements rather than belonging to a specifically defined category. The Slovenian Obligations Code (Obligacijski zakonik, OZ) is therefore important for negotiations and the performance of obligations, including its principle of good faith and fair dealing and its rules on liability during negotiations.

The absence of dedicated franchise legislation does not mean that a contract can override all statutory rules. Depending on the nature of the relationship, other legislation also applies, such as competition law. The dispute resolution procedure should therefore be reviewed by a lawyer who understands the agreement as a whole, not just its final clause on which court has jurisdiction.

Before making your first offer to a prospective franchisee, decide which disagreements you will initially try to resolve at an operational level and which require immediate legal assessment. An incorrectly issued invoice is not the same as suspected unauthorised use of a trade mark or disclosure of confidential know-how.

Core contractual rules belong in the agreement itself. Contact details and practical instructions can sit in an appendix, but the process for updating them must not allow unilateral changes to the other party’s fundamental rights.

2. Define how disagreements are reported and documented

The first step should be a clear written notice. Do not insist on a complicated form that discourages the other party from reporting a problem. Do, however, require enough information to understand the complaint and check the facts.

The notice should include:

• a description of the incident and the date it was identified;
• the obligation that the party believes has not been fulfilled;
• available evidence, such as an invoice, order or record of communications;
• a description of the impact on the business;
• a proposed solution and an indication of any urgency.

Agree on an address for sending notices, a responsible person and an alternative contact. Also work with a lawyer to establish rules on the receipt or service of contractual notices. A message to a sales adviser should not be the only evidence that the other party was made aware of the problem.

Distinguish between acknowledging receipt and providing a substantive response. The first confirms that the notice has arrived; the second must explain the party’s position and the next step. Set deadlines according to your team’s actual capacity and the urgency of each type of problem, rather than assuming that every case is equally demanding.

Keep a case record: who is handling it, which facts have been confirmed, what remains disputed and what has been agreed. Restrict access to those who need the information to deal with the matter.

3. Create a short route from discussion to decision

For minor disagreements, it makes sense for the operational contacts to discuss the matter first. If they cannot reach a solution, it should pass to people authorised to make a binding business decision. This escalation process prevents a party from spending weeks speaking to someone who lacks the necessary authority.

At a joint meeting, separate three questions: what happened, what the contract requires and what solution is feasible. The minutes should clearly distinguish between agreed facts and each party’s position. Signing the minutes should not create uncertainty about whether a party is also admitting liability.

For example, a franchisee disputes an invoice because they believe a particular service was not provided. The franchisor supplies records showing that the work was carried out, while the franchisee explains which part is missing. The outcome might be a corrected invoice, completion of the outstanding work or a reasoned rejection of the complaint. Every resolution needs a responsible person, a deadline and written confirmation.

Also agree in advance how the parties should act while a dispute is ongoing. Will undisputed obligations continue to be fulfilled? How will the disputed portion of an invoice be handled? Do not assume that raising a dispute automatically permits all payments to be withheld, or that the other party can suspend all services without a legal assessment.

4. Keep a route open to independent resolution

If direct discussions fail, the agreement can provide for an attempt at mediation. A mediator helps the parties reach an agreement but does not decide for them. It is sensible to specify how the mediator will be chosen, how costs will be shared and when either party may pursue another legal route.

Draft any clause on court proceedings or arbitration with particular care. Arbitration is not another name for mediation, so do not copy template clauses without understanding their consequences. When choosing an approach, consider the costs, the complexity of likely disputes and both parties’ resources.

Discussions under the contract must not create a false sense that statutory time limits have stopped running. Check with a lawyer how the chosen procedure affects those time limits, and explicitly address the possibility of urgent court relief.

Practical takeaway: before launching your first franchise, test the procedure using a hypothetical disagreement. If the team cannot explain who receives the notice, who makes the decision and how the resolution is recorded, the procedure is not yet ready to support the expansion of your franchise network.