How Should Concept Updates Be Planned in a Franchise Agreement?

When preparing to franchise your existing business, defining its current concept is not enough. Décor, equipment, software and service delivery may all change over time. Refurbishments you can approve on your own in a company-owned business require costs and responsibilities to be allocated across a franchise network of independent operators. Establishing a clear change-management framework before the first agreement helps maintain brand consistency while protecting franchisees from unexpected investment commitments.

1. Define which changes count as updates

Start by creating a baseline record of the current concept. Compile a dated list of the equipment, décor, software and key customer service features in use. The aim is not to write another operations manual, but to document the starting conditions the franchisee has accepted. This provides a basis for determining whether a subsequent change constitutes maintenance, an update to standards or new investment.

You can divide changes into three categories:

• Maintenance and like-for-like replacement: Replacing a worn item with one that performs the same function.
• Mandatory adaptations: Changes required for regulatory compliance or a documented safety need.
• Concept development: Commercial choices such as a new store design, a different service process or additional technology investment.

This classification prevents every request from automatically being treated as urgent and mandatory. For example, replacing a functioning counter simply because it does not match a new colour scheme should not follow the same timetable as replacing unsafe equipment.

For each category, specify who has decision-making authority, what justification is required and who bears the cost. Do not subject minor visual changes and refurbishment work requiring the business to close to the same approval process.

2. Establish the legal limits on the power to require changes

Türkiye has no dedicated law governing franchise agreements. A franchise relationship is treated as a sui generis or mixed contract. The Turkish Code of Obligations No. 6098 is particularly relevant, alongside the Turkish Commercial Code No. 6102 and the Law on the Protection of Competition No. 4054, depending on the nature of the relationship. The Industrial Property Law No. 6769 is also important for trade mark rights.

There is no general mandatory registration system specifically for franchise agreements, nor a statutory regime requiring a standard pre-contractual disclosure document. However, this does not mean that an unrestricted power to require changes can be granted. The principle of good faith, pre-contractual liability and the rules on standard contract terms must be taken into account.

In particular, standard terms in pre-drafted contracts that allow the drafting party to make unilateral changes or introduce new provisions to the other party’s detriment may be deemed unwritten under Article 24 of the Turkish Code of Obligations. Avoid broad wording such as ‘head office may require any investment at any time’.

Instead, specify the subject, justification and scope of changes, together with the notification method and decision-making procedure. Separately identify situations requiring the operator’s subsequent consent. Have a specialist lawyer assess the legal validity of this framework in the context of the agreement as a whole.

3. Assess investment decisions using the total cost

An update budget involves more than the purchase price of new equipment or furniture. Transport, installation, removal of old components, software migration, staff adjustment time and operational disruption must also be considered. The franchisor’s team preparing the proposal should produce a change budget that makes these costs clear.

Record the answers to the following questions for each proposal:

• Why is the existing item or system no longer adequate?
• Could a lower-cost adaptation achieve the same aim?
• Can the business remain open while the work is carried out?
• Which party will bear the expense, and on what terms?
• What data supports the expected commercial benefit?

Requiring a major refurbishment at an outlet approaching the end of its agreement needs separate consideration. Assess any mismatch between the remaining contract term and the period over which the investment can be used. Discuss options such as deferral, phased implementation or a contribution towards costs; do not assume that the agreement will be renewed.

Do not claim that the new concept is guaranteed to increase sales. Present the anticipated benefits separately from the assumptions and uncertainties behind them. Establishing this approach before the first franchise agreement makes it easier to treat operators in comparable circumstances consistently later on.

4. Make notification and transition arrangements workable

Prepare a brief change proposal for each update request. It should set out the current situation, proposed solution, technical requirements, estimated cost, implementation timetable and acceptance criteria. Simply sending an image of the new design with a completion deadline is not enough.

Plan the notice period according to the scale of the change. Equipment delivery, necessary permits, property-related approvals and the business’s peak trading periods may all affect the timetable. Do not assume there is a single statutory franchise notice period that applies to every update; set out the periods in the agreement and the specific implementation plan.

Before implementation, establish a way for franchisees to comment on costs or technical feasibility. Assess requests for exceptions on the basis of written reasons. Where an outlet is granted a deferral, record the revised deadline, interim solution and arrangements for maintaining the brand’s appearance.

Finally, verify completion through functional checks, not just photographs. Check that equipment works, software is compatible with existing processes and the business can continue providing its services. Decide in advance who will step in if unexpected problems arise.

Practical takeaway: Before signing the first franchise agreement, prepare a sample update request from start to finish. If the justification, total cost, approvals, timetable and responsibilities are not clear, your change-management framework is not yet ready.