How to Prepare Earnings Claims for Franchise Marketing

When preparing to franchise your existing business, one of the first questions prospective franchisees ask is: “How much will I earn?” Presenting your own outlet’s results as a promise that applies to every investor, however, is misleading. Building trust within the franchising community means separating earnings information from the sales pitch and basing it on verifiable calculations. This guide explains how to prepare financial claims for marketing presentations, advertisements and discussions with prospective franchisees in Turkey.

1. Understand the legal boundaries

Turkey has no dedicated franchise law governing franchise agreements. Nor is there a general requirement to register on a public register specifically for franchising, or a statutory standard pre-contractual disclosure form. This does not, however, mean that you can make unsupported earnings promises to prospective franchisees.

Relevant provisions include those on contract formation, defects in consent and liability under the Turkish Code of Obligations No. 6098, alongside the principle of good faith under the Turkish Civil Code No. 4721. Providing false or misleading information during contract negotiations may give rise to liability, depending on the circumstances. The unfair competition provisions of the Turkish Commercial Code No. 6102 should also be considered when reviewing marketing language.

For consumer-facing advertising, the Law on Consumer Protection No. 6502 and the Regulation on Commercial Advertising and Unfair Commercial Practices may also be relevant. However, someone acquiring a franchise for business purposes should not automatically be assumed to qualify as a consumer. The target audience and the nature of the transaction should be assessed with a legal adviser.

Core principle: The absence of a mandatory disclosure format does not give you licence to conceal material assumptions or present projected results as guaranteed earnings.

2. Define exactly which financial result you mean

Rather than using vague phrases such as “high earnings”, explain what each financial term covers. Turnover, gross profit, operating profit and the cash left in the investor’s hands are not the same thing. Using them interchangeably in a presentation can make even accurate data misleading.

Prepare a brief definition sheet for each calculation:

• Turnover: Is it inclusive or exclusive of VAT? Have returns and discounts been deducted?
• Gross profit: Which direct costs have been deducted from sales?
• Operating result: Does it include rent, staffing, energy, delivery commissions and payments to the franchisor?
• Cash position: Have taxes, loan repayments and equipment replacement costs been taken into account?
• Payback period: Which initial investment figure is being compared with which cash flows?

Unpaid work by the business owner should not be left out of the picture. If a franchisee would employ a paid manager to do work currently carried out by the founder in your own outlet, the model should show that cost. Similarly, if you operate from premises you own, do not directly apply the results of a rent-free outlet to a business operating from rented premises.

These definitions establish a common language, preventing the sales team from using different “profit” figures in different meetings.

3. Make outlet data comparable

Earnings claims should be based on actual trading data that can be reconciled with accounting records and sales reports. Rather than selecting only the strongest month or best-performing outlet, explain why you have chosen particular periods and businesses. If you have only one outlet, state this clearly; do not use a single observation to produce an average for an entire network.

Keep a separate table of factors affecting comparability: location, premises size, opening hours, time since opening, sales channels and customer profile. Flag effects that may not recur, such as launch promotions, temporary rent reductions or unusually large bulk orders.

As costs and selling prices in Turkey can change at different rates, display the period covered by the data prominently. Do not compare revenue from an earlier period with current expenses. If you update the figures, show the pricing and cost assumptions separately; do not present an updated calculation as an actual historical result.

For example, an outlet focused on delivery may have high turnover, but commissions and packaging costs can change the overall result. Sharing sales figures alone leaves prospective franchisees with an incomplete picture of the business’s economics. Complete an accounting review of the model before using it in a sales presentation.

4. Clearly distinguish projections from commitments

Present actual results and forward-looking scenarios under separate headings. “Historical results of the existing outlet” and “Illustrative calculation for a new business” should also be visually distinct. A general disclaimer in a footnote does not make a headline promise of guaranteed earnings acceptable.

Instead of offering a single optimistic outcome, prepare scenarios showing base-case and adverse conditions. Explain how results would be affected if sales grew more slowly than expected, staffing costs rose or rental costs changed. Unless there is evidence supporting the likelihood of these scenarios, do not present them as forecasts with an established probability of occurring.

Rather than saying “the investment is guaranteed to pay for itself”, explain the conditions under which the calculation produces that result. When calculating the payback period in particular, do not leave out pre-opening expenditure, early trading losses or additional cash requirements. A calculated payback period is not a guaranteed one.

5. Establish approval and record-keeping procedures before publication

Financial claims do not appear only in presentation slides. Online advertisements, conversations at trade fairs, messages and statements made by intermediaries should all be subject to the same controls. Give the sales team written guidance on approved wording and statements implying certainty that they must avoid.

For each claim, retain the data source, calculation file, assumptions, reviewer’s name and date of the latest update. Review financial calculations with your accountant, and ask your legal adviser to check the marketing language and its consistency with the contract. Record which version was sent to each prospective franchisee and when; if you discover a material error, communicate the correction in writing as well.

Practical takeaway: Before publishing earnings claims, answer three questions: Can the figure be verified? Are all material expenses visible? Can the prospective franchisee tell whether it is a historical result or an assumption? If any answer is no, correct the marketing material before using it.