How to Set a Sales Pricing Policy Before Franchising Your Business

When preparing to franchise your existing business, you need to clarify who will set the prices customers pay. The centralised pricing management you use in company-owned branches cannot simply be extended to independent franchisees. A healthy franchise network maintains a consistent brand experience while allowing operators commercial independence. This guide covers the selling prices of products and services offered to consumers, not initial franchise fees or ongoing royalties.

1. Establish the legal boundaries at the outset

Türkiye has no dedicated franchise law governing franchise agreements. Nor is there a general public registration requirement specific to franchising or a mandatory, standardised pre-contractual disclosure system. This does not, however, mean that the parties have unrestricted freedom to set pricing policy.

The Turkish Code of Obligations No. 6098 is relevant to the formation and performance of agreements, the Turkish Commercial Code No. 6102 to commercial relationships, and the Industrial Property Code No. 6769 to trade mark rights. The key legislation governing control over selling prices is Law No. 4054 on the Protection of Competition, particularly Article 4, which addresses agreements that restrict competition.

Block Exemption Communiqué No. 2002/2 on Vertical Agreements sets out the conditions under which vertical agreements within its scope may benefit from an exemption. Setting a buyer’s fixed or minimum resale price is a hardcore restriction that can take an agreement outside the block exemption. Recommended or maximum prices must not become fixed or minimum prices in practice through pressure or incentives.

Eligibility for the block exemption does not depend solely on inserting suitable wording into the agreement. Market shares, other restrictions and actual practice must also be assessed. Have your policy reviewed for competition law compliance before putting it into use.

2. Distinguish three different concepts in your pricing documents

Prepare a short pricing glossary for your head office team. Using the same term with different meanings in your documents can lead to incorrect instructions in the field.

• Recommended price: A non-binding suggestion that the operator is free to change. There should be no penalties for selling above or below it.
• Maximum price: A ceiling below which the operator is free to sell. Avoid practices that turn it into a single fixed price in reality.
• Fixed or minimum price: A requirement for the operator to sell at a specified price or no lower than a specified floor. This creates serious competition law risks.

For example, labelling a price list as “recommended” while withdrawing advertising support from an operator who charges less contradicts that statement. Similarly, capping the discount an operator can offer may indirectly establish a minimum selling price.

It is useful to explain the basis for pricing recommendations, such as product positioning, illustrative cost calculations and customer expectations. However, do not turn a costing exercise into a rule imposing the same profit margin on every operator. Recognise that rent, labour costs and local demand may vary.

3. Configure till software and promotions to allow independent decisions

The pricing freedom granted in the agreement must also be available in the software. Sending out a central product list is not the same as locking selling prices so they cannot be changed. Review price-update permissions, change logs and online sales interfaces with your software provider.

Before you start franchising, prepare written answers to these questions:

• Can the operator change a recommended price without head office approval?
• Does an update sent by head office automatically overwrite the operator’s chosen price?
• Does offering a discount require a support request or a manager’s approval?
• Are differences between website and in-store prices clearly communicated to customers?

For joint promotions, agree participation terms, cost-sharing arrangements and customer communications in advance. Calling something a “brand promotion” does not, by itself, make fixed pricing lawful. Seek a separate review of arrangements involving compulsory participation and a single price.

Consumer-facing promotional announcements must also take account of Law No. 6502 on Consumer Protection and the Regulation on Commercial Advertising and Unfair Commercial Practices. If some outlets are not participating, advertising must not give the impression that the same offer is available everywhere.

4. Remove sources of pressure outside the agreement

Competition risks do not arise solely from contractual clauses. A regional manager’s message, meeting minutes or the conditions of a support programme can also affect pricing independence. Train your sales, marketing and field teams to follow the same rules in practice.

Threatening an operator with delayed deliveries for not following a price, making contract renewal conditional on a particular price level, or repeatedly calling to demand that a discount be withdrawn are all risky behaviours. Head office must not turn complaints from other operators that “this outlet is selling too cheaply” into instructions to enforce pricing discipline.

Do not encourage operators at network meetings to share their future prices, discounts or target margins with one another. Keep the agenda focused on training, service quality and operational improvements. Establish a clear procedure requiring the chair to intervene if commercially sensitive information is raised for discussion.

5. Test implementation before signing the first agreement

Run a tabletop exercise in which an operator charges less than the recommended price. Check how the software, field team, advertising team and contractual provisions respond to that decision. Correct every step that, in practice, blocks the freedom granted in the documents.

Keep an approved pricing policy, a software permissions matrix, a promotion template and staff training records in your compliance file. Assign responsibility to a named person and repeat the review whenever you introduce a new sales channel or promotional model. Keep brand standards audits separate from price monitoring.

Practical takeaway: Before franchising your business, design not just your price list but also how it will work in practice. If your agreement, software and field teams do not all protect the same freedom to make independent decisions, your pricing policy is not yet ready.