Franchise Expansion to Germany

In Germany, there is an obligation to provide pre-contractual information to potential franchise partners. The easiest way to fulfil this obligation is to draw up a document called "pre-contractual information". If a franchisor violates this obligation, this often leads to the invalidity of the franchise agreements and to claims for damages.

Many franchise systems that expand to Germany take their standard franchise agreement and think they can use it without modification. However, due to the pre-contractual information requirements, special attention must be paid to whether the franchise agreement or other legal documents such as the manual contain any statements that contradict the "pre-contractual information". If this is the case, there is a high probability of a breach of duty.

There are numerous cultural differences that mean that the acquisition of franchise partners in Germany is different than in other countries. Starting with the marketing of the franchise system through to the contract negotiations and the signing of the contract.