Preparing a Prospective Franchisee Information Pack Before Offering Franchises

When you start offering franchises of a successful business, the first meeting with a prospective franchisee is more than an opportunity to introduce the brand. They need to understand what they will be investing in, what support they will receive and what risks they will take on. Prepare an information pack, supported by documentary evidence and separate from your sales presentation. This helps build trust within the franchising community before a contract is signed and prevents the business from expanding on the strength of unverified promises.

1. Define the pack’s legal purpose correctly

Türkiye has no specific legislation governing franchise relationships exclusively. Nor is there a general requirement for a franchise-specific pre-contractual disclosure document, a statutory waiting period or registration on a franchise register. This does not, however, mean that prospective franchisees may be given incomplete or misleading information.

The general provisions of the Turkish Code of Obligations No. 6098 apply to the contractual relationship. The principle of good faith under the Turkish Civil Code No. 4721 is also relevant to conduct during contract negotiations. Providing incorrect information or withholding matters material to a decision may give rise to liability, depending on the circumstances. The unfair competition provisions of the Turkish Commercial Code No. 6102 must also be considered in promotional material and commercial statements.

The Industrial Property Code No. 6769 is relevant to trade mark use, while the Law on the Protection of Competition No. 4054 applies to territorial and competition restrictions. When processing prospective franchisees’ personal data, you must comply with the Personal Data Protection Law No. 6698. The absence of a specific franchise registration requirement does not remove obligations relating to the trade registry, tax or operating licences.

Design the pack as a consistent, verifiable source of information, not as a legally prescribed form. Have it reviewed by a lawyer before signing; remember that the contents of a voluntarily prepared document can still have legal consequences.

2. Show the evidence behind the business and its limitations

In the first section, explain which legal entity will enter into the agreement, who owns the brand and at which sites the business model has been tested. Clearly distinguish company-operated outlets from those run by independent franchisees. If there are no franchised outlets yet, say so explicitly.

The description of the pilot operation should consist of more than attractive photographs. Set out factors that affect performance, such as the type of location, when it opened, the size of the premises, opening hours and the owner’s day-to-day involvement. Do not assume that performance achieved with the founder constantly on site can be replicated by another operator.

Include the following information to help prospective franchisees assess the opportunity:

• The period covered by the pilot data and its source.
• Opening promotions or exceptional expenses.
• Processes that have not yet been tested at another site.
• Planned changes to the system that could affect investment costs.

Accurately describe the scope and status of trade mark registration too. Filing an application is not the same as securing registration. If another rights holder owns the trade mark, ask your lawyer to verify the basis of your authority to grant franchisees the right to use it.

3. Separate investment costs from earnings information

The cost schedule in the pack should cover more than the initial franchise fee. Show items such as fit-out, equipment, opening stock, software, travel for training, rental deposits and post-opening working capital separately. State the date of the quotation or actual expenditure on which each amount is based, and make clear whether VAT is included.

Assign each item to one of three categories: fees payable to the franchisor, expenses payable to third parties and estimated working capital requirements. This allows prospective franchisees to see who will receive the money and when it will be due. Do not present estimated expenses as fixed prices; explain how location and capacity may affect costs.

If ongoing royalties or advertising contributions are calculated as a percentage of turnover, define turnover consistently with the draft agreement. Make clear how returns, discounts, taxes and online sales are treated in the calculation.

When sharing earnings information, present actual results, forecasts and targets under separate headings. Do not present turnover as profit. Disclose any unpaid work by the founder, low rent or benefits provided by a related company. Do not present the results of a single successful outlet as a guarantee of income for every prospective franchisee. Share the sales, staffing and rent assumptions used in scenario modelling in a format that allows prospective franchisees to adjust them.

4. Align promises with the agreement and your capacity to provide support

Every promise of support in the pack should have someone in your business responsible for delivering it and a practical means of doing so. Rather than promising ‘full support’, explain the scope of initial training, how site visits are scheduled and which channel will be used to handle technical requests.

Use a simple checklist to compare:

• The promise made to the prospective franchisee.
• The relevant clause in the agreement.
• The person or team responsible for delivery.
• Whether the service is included in the fees.

Sharing the contents page of the operations manual can help prospective franchisees understand the rules. Disclose trade secrets in stages, with appropriate confidentiality safeguards. Do not use a confidentiality undertaking as a reason to conceal material investment risks.

Give particular prominence to territorial protection, online sales, mandatory sourcing, renewal and exit terms. Explain that territorial protection does not mean unlimited exclusivity, and have competition restrictions reviewed by a specialist.

5. Keep records of delivery and updates

Give each pack a version number and preparation date, and name the person responsible for its contents. Record which version was sent to each prospective franchisee and which attachments accompanied it. Allow reasonable time for them to review the draft agreement and seek independent professional advice; do not describe this as a statutory waiting period in Türkiye.

Keep a written record of questions and answers. If a material cost, right or support term changes before signing, provide the updated information again. An acknowledgement of receipt shows that the prospective franchisee received the document; it does not remedy misleading statements or transfer all responsibility to them.

Practical takeaway: Prepare your pack before the first meeting with a prospective franchisee. Support every material claim with a document, every fee with a clear calculation method and every promise of support with genuine capacity to deliver.