Sales Promises When Franchising a Business in Venezuela

When franchising an existing business, a promise made during a visit can create just as many expectations as a formal presentation. ‘We help you with everything’ or ‘you’ll recoup your investment quickly’ may sound like sales talk, but they can lead to disagreements over money, support and results. To build a trustworthy franchise network, it is worth controlling what is promised, who is authorised to make those promises and how they are documented before signing.

1. Distinguish legal obligations from good practice

Venezuela has no specific franchise law requiring a pre-contractual disclosure document with standard content and deadlines for all franchises. That does not mean negotiations fall outside the law, or that the parties can agree to anything they like in the contract.

The Civil Code provides the general rules on consent, obligations, contracts and good faith. The Commercial Code applies to the commercial relationship. The Industrial Property Law and relevant general rules on competition, advertising and user protection must also be considered, depending on the activity and circumstances.

Misleading information or a significant discrepancy between what was offered and what was agreed in the contract can give rise to disputes over consent or performance of contractual obligations. The legal consequences depend on the facts and require professional assessment; not every sales statement automatically creates an enforceable obligation.

The Code of Ethics of Profranquicias, Venezuela’s franchise association, provides for advance disclosure through a Uniform Franchise Offering Circular (Circular Uniforme de Oferta de Franquicia). This is a self-regulatory framework, not national legislation. Its enforceability must be assessed in light of association membership, adherence to the code and the commitments made. It should not be presented as a universal legal requirement.

2. Take stock of what you are actually promising

Before bringing your first franchisee on board, review presentations, emails, messages, advertisements and meeting scripts. The aim is not to draft another sales offer, but to identify commitments that might otherwise be overlooked when preparing the agreement.

Create a table with five columns: statement, person responsible, supporting evidence, conditions and document in which it will be recorded. Pay particular attention to:

• Financial performance: sales, margins or investment payback periods mentioned to the prospective franchisee.
• Support: visits, remote assistance, on-site support during opening and team availability.
• Exclusivity: statements such as ‘that territory will be yours’, even where its boundaries have not yet been agreed.
• Included costs: equipment, training, travel, materials or services advertised as covered by the initial payment.
• Dates: the estimated opening date, equipment delivery and staff availability.

Classify each statement as a proposed obligation, an evidence-based estimate or a possibility subject to approval. If it lacks supporting evidence, withdraw or correct it before proceeding. Adding a generic disclaimer at the end of a presentation is not enough if the main message still promises a guaranteed outcome.

3. Turn ambiguous statements into verifiable commitments

A useful statement should allow both parties to reach the same understanding. ‘Ongoing support’ does not explain hours, channels, scope or response times. Nor does ‘support during opening’ specify who will travel or who will pay their expenses.

Replace these expressions with concrete descriptions that match what you can realistically deliver. For example: remote assistance through a specified channel during agreed hours, and in-person visits with a defined frequency and clear arrangements for expenses. The final details must match the agreement and its annexes.

For financial projections, identify the outlet used as a reference, the period observed, the costs included and the assumptions used. Clearly distinguish historical data from estimates. Explain that the performance of a company-owned outlet does not guarantee the results of a future franchised outlet.

If a statement already communicated turns out to be incorrect, send a clear correction. Identify what has changed and allow the prospective franchisee to reconsider their decision before making any commitments. Quietly updating the sales document leaves the original expectation unresolved.

4. Finalise and reconcile the documentation before signing

Designate who can approve special terms. Sales staff, consultants and intermediaries must understand those limits and use up-to-date materials. Avoid allowing each person to improvise discounts, exclusivity arrangements or additional services.

Before signing, carry out a cross-check:

1. Compare relevant communications with the agreement and its annexes.
2. Resolve discrepancies and outstanding questions in writing.
3. Identify each document by date and version.
4. Keep a record of delivery and allow reasonable time for independent review.
5. Retain clarifications and approvals in the prospective franchisee’s file.

An acknowledgement of receipt proves that something was delivered; it does not make false information true or, by itself, remove potential liability. Nor is it advisable to rely solely on a clause stating that all previous discussions are superseded. Seek a legal review of the full set of documents, not just the signature page.

In practice: before accepting a payment or signing, check that every significant promise is supported, has clear conditions and is consistently reflected in the final documentation.