The decisions that really determine the success of a franchise network

Andrea García Tomás, a lawyer specialising in franchising and founder of Andrea García Franquicias.

There is a widely held belief in the franchising world: that the success of a network depends on a strong brand, an attractive product and a well-drafted contract. However, after years of advising both franchisors and franchisees, I have come to a different conclusion: the decisions that truly shape the future of a network begin much earlier.

It is often thought that disputes arise when one of the parties breaches the contract. My experience, however, has taught me that most problems have their roots much earlier. They do not start out as a legal problem; they begin as a business decision that could have been made differently.

Over the years, I have come to a conviction that guides my understanding of franchising: the law can resolve a dispute. But the right decisions are those that ensure that dispute never arises in the first place.

And that, in my view, is precisely where the real work of a strong franchise network begins.

The first of these decisions is, probably, the most important: choosing the right franchisee.

Not everyone who wishes to join a franchise network fits the profile that the brand requires. Sometimes priority is given to financial capacity, the speed with which a new outlet can be opened, or the opportunity for growth in a specific territory. However, the most successful franchise networks are those that understand that bringing on board a new franchisee means welcoming a new brand ambassador for many years to come.

Another crucial decision is the way in which the project is presented to the prospective franchisee. The Pre-Contractual Information Document (PCID) should not be viewed merely as a legal obligation, but as a genuine tool for transparency. Personally, I consider it far more useful to work with different business development scenarios — optimistic, conservative and unfavourable — than to provide a single sales forecast. Business reality never fits a single scenario, and a franchisee who understands that reality makes decisions with greater certainty and confidence.

Transparency does not weaken a network; on the contrary, it strengthens it.

There are also very practical issues that end up having a huge impact on the relationship between head office and its network. A common example arises during the pre-opening phase. Let’s imagine an opening in Seville. The franchisee knows local fit-out companies, electricians or machinery suppliers with whom they have worked for years and who can offer a high-quality service at a competitive price. However, some head offices impose suppliers based hundreds of kilometres away, increasing costs and making it difficult to coordinate the opening.

When the brand does not have an approved supplier in that area, allowing the use of local partners who meet the required standards usually benefits both parties. The franchisee reduces costs and time, whilst the head office maintains control over the quality of the project. In my experience, small decisions such as this end up making a big difference to the franchisee’s perception of the brand.

The pre-opening phase, in particular, deserves special consideration. It is a phase that is often not given the importance it truly deserves. During those months, building works, licences, supplies, training, the implementation of the corporate identity and dozens of small decisions that will determine the start of operations are all coordinated.

I have seen extraordinary projects end up opening weeks behind schedule simply because nobody coordinated any of these elements properly. And that delay not only affects the return on investment; it also shapes the level of confidence with which the franchisee begins their relationship with the brand.

That is why I often say that the franchisor’s work does not end when the franchisee signs the contract. In fact, that is precisely when it begins. Expanding a network is not just about opening new outlets. It is about supporting those who have decided to place their trust in a business model and ensuring that trust is maintained over the years.

Expanding a network means, above all, building trust.

That is why I believe that the strongest franchises are not necessarily those that grow the fastest, but those that build stable, transparent and sustainable business relationships. Balanced contracts, clear processes, constant communication and genuine support throughout the contractual relationship ultimately prove to be far more decisive than any expansion campaign.

That is precisely the philosophy on which Andrea García Franquicias was founded. We provide legal support to both franchisors and franchisees throughout the entire life cycle of the franchise: from the creation and expansion of a network to the prevention and resolution of disputes, always recognising that behind every contract there is a business venture that deserves to be protected.

The success of a franchise is often measured by the number of outlets it manages to open. Personally, I believe that true success is measured in a different way: by the ability to ensure that every new franchisee still wants to be part of the network five years down the line.

For all these reasons, we have come to a welcome conclusion: a solid franchise is not built when conflict arises. It is built long before that.