How to Verify Turnover Claims Before Buying a Franchise

High turnover figures presented during a franchise discussion do not, on their own, show that the investment is right for you. The real question is which outlet achieved those figures, over what period and at what cost. Before joining a franchise network in Türkiye, turning the sales pitch into a verifiable due diligence file will help you make better decisions about both the brand and your financing. This guide focuses specifically on how to test turnover and profitability claims before making any payment.

1. Understand that there is no mandatory disclosure document

Türkiye has no standalone franchise law specifically governing franchise agreements. Nor is there a general public register specifically for franchise offerings or a mandatory pre-contractual disclosure document in a prescribed format. Do not therefore assume that disclosure documents used in other countries are automatically required in Türkiye. General business obligations, such as trade registration, tax compliance and operating permits, are separate matters.

This does not mean that franchisors bear no responsibility for misleading information. The Turkish Code of Obligations, Law No. 6098, is relevant to contract formation and defects in consent, while the Turkish Civil Code, Law No. 4721, governs the principle of good faith. The Turkish Commercial Code, Law No. 6102, may also be relevant to commercial relations and unfair competition. Other aspects of the relationship may fall under the Law on the Protection of Competition, No. 4054, and the Industrial Property Code, No. 6769.

The absence of a specific disclosure requirement does not mean you should refrain from requesting documents. Set out in writing the information you require, delivery deadlines and the time allowed for review. These are protections to negotiate, not automatic statutory rights. Equally, do not assume that a prospective franchisee making a commercial investment automatically benefits from consumer cancellation rights.

2. Ask for a definition of every figure in the presentation

“Average monthly turnover” is not a useful basis for comparison unless you know how it has been calculated. Ask the brand for a short table explaining the scope of the data behind each financial claim. It should answer the following questions:

• Does the figure include or exclude VAT? Have returns and discounts been deducted?
• Does it represent gross sales or the amount remaining after delivery platform deductions?
• What date range and how many outlets does it cover?
• Are the outlets franchisee-owned or operated directly by the brand?
• Are newly opened, closed or transferred outlets included?
• Is the result based on actual performance, a target or a hypothetical forecast?

Ask in particular what is meant by “profit”. Gross profit after product costs is not the same as the result after rent, staff costs, franchise royalties, advertising contributions, financing costs and taxes. If you intend to work in the business yourself, make sure the calculation also includes an allowance for your own labour.

If a payback period is quoted, ask what is included in the initial investment. If deposits, opening stock, licensing costs and working capital have been left out alongside the fit-out costs, the quoted period may not reflect your total cash requirement.

3. Test the data against comparable outlets and supporting records

The results of the best-performing outlet are not sufficient evidence for your planned location. Compare outlets of a similar size, with similar customer profiles and rental arrangements. Do not group a high-street shop with a shopping centre outlet, or a newly opened business with an established one.

Ask the brand for monthly data, ideally covering a full operating cycle that reveals seasonal patterns. Do not compare historical figures directly with today’s costs. Examine transaction numbers and average transaction values separately to establish whether turnover growth comes from price increases or a higher volume of transactions.

Review the records supporting the summary table with your accountant. You can check for consistency between anonymised sales reports, income statements and relevant accounting records. Bank receipts alone do not prove turnover: payment timing and collection channels can create differences.

Speak independently with franchisees, subject to mutual consent and confidentiality, rather than limiting yourself to discussions authorised by the brand. Ask about cash shortfalls during the opening period, unexpected expenses and differences between the forecasts in the presentation and actual results. Confidentiality concerns may be understandable, but rejecting alternatives such as anonymised data or a review by a professional adds to the uncertainty. Do not treat an unverifiable claim as guaranteed income.

4. Translate turnover into your own cash flow

Even an outlet’s verified turnover does not guarantee your earnings. Prepare a monthly cash-flow forecast using your own rental quotation, staffing plan and supply terms. If you plan to borrow, show loan principal repayments as cash outflows alongside interest costs: accounting profit and cash left in the bank are different things.

Alongside your base case, model lower sales, a delayed opening and rising costs. Rather than choosing percentages at random, draw on actual differences between outlets, local demand research and current quotations. Identify how much additional cash the business would need under each scenario.

Check carefully which turnover figure is used to calculate franchise royalties. If platform commissions, returns or discounts are not deducted from the royalty calculation base, sales growth may generate less cash than you expect. Assess the outcome not just by the investment payback period, but also by the business’s ability to service its debt.

5. Incorporate key representations into the contract

Record the date, preparer and underlying assumptions of the financial statements that influence your decision. Keep presentations and correspondence. With your lawyer, negotiate for key representations to be included in an annex to the agreement and for the extent of data verification to be explained. A representation that historical results are accurate must be distinguished from a guarantee of future earnings.

Have clauses stating that you have “not relied on prior representations” or that the document “constitutes the entire agreement” reviewed carefully. Such clauses do not automatically make misleading conduct lawful, but they may affect disputes over evidence and interpretation. If an advance payment is requested, agree the refund conditions in writing beforehand, including what happens if the review remains incomplete or material discrepancies emerge in the data.

The practical takeaway: Define the turnover claim, verify it against comparable outlets and test it in your own cash-flow forecast. Holding off on payment until significant uncertainties have been resolved is a sounder starting point than trying to settle a dispute later.