Understanding the European Franchise Landscape

Unlike the USA, where franchising is governed nationally by the Federal Trade Commission (FTC), Europe is a patchwork of national laws and voluntary codes of ethics. The EU does not have one unified franchise law: instead, each member state applies its own regulations, and many also follow the European Code of Ethics for Franchising, developed by the European Franchise Federation (EFF).

This means franchisors must:

• Understand local laws in each target country (covering contracts, disclosure, intellectual property, and competition law).
• Adapt franchise agreements to comply with local legal frameworks while maintaining global brand consistency.
• Respect cultural and market nuances in recruitment, training, and support.
• Ensure pre-contract disclosure is transparent and thorough, even where it’s not legally mandated, to build trust and reduce legal risk.

Key Elements of European Franchising Compliance

Pre-Contract Disclosure

• While disclosure is not harmonised across Europe, many countries require franchisors to provide written information on the business model, financial projections, training, and ongoing fees.
• Countries like France, Italy, Belgium, and Spain have specific disclosure laws, with strict deadlines for providing the information before signing.

Franchise Agreement

• Must be clear, enforceable, and tailored to local law while protecting the franchisor’s brand standards and intellectual property.
• Should clearly outline operational obligations, marketing contributions, and dispute resolution mechanisms.

Operational Standards

• The franchise system must be clearly documented in an operations manual to ensure consistency across borders.
• Training and support should reflect local cultural norms and consumer expectations.

Intellectual Property Protection

• Trade marks, logos, and brand assets should be registered in each target market before franchise recruitment begins.

Why Compliance is Critical in Europe

• Minimise Legal Risks: Avoid costly disputes, fines, and reputational damage by aligning with local laws and ethical codes.
• Build Franchisee Confidence: Demonstrate professionalism, transparency, and operational strength to attract high-quality franchisees.
• Facilitate Cross-Border Growth: A solid legal and operational foundation makes it easier to expand into multiple European markets quickly and efficiently.

For Brands Expanding to the USA

If your growth strategy includes the US, you must comply with FTC Franchise Rule regulations, which require a Franchise Disclosure Document (FDD) and specific timing for delivery before signing. The US also has state-level registration and disclosure laws in certain states, requiring additional filings.

Through our direct partnership with FMS USA, we can prepare your European system for full US compliance while maintaining brand consistency on both sides of the Atlantic.