Creating a sales brochure

The sales brochure helps you in convincing the right acquisition candidate for your franchise business. The brochure provides the potential buyer with all the essential information needed to gain the confidence to make the decision. The sales brochure will then become part of the Pre-Contractual Information Document that prospective franchisees must receive in advance according to franchise law.

The franchise sales brochure

A franchise sales brochure may include the following topics:

• Explanation of the franchise formula
• Your history as an entrepreneur and the reasons for selling
• Coverage area
• Market position
• Acquisition option(s)
• Operation
• Indicative prospects
• Acquisition conditions
• Acquisition price
• Desired transaction date

The sales brochure as part of the Pre-contractual Information Document

In addition to the sales brochure, a Pre-contractual Information Document must also be provided. This document should be shared when the prospective franchisee has indicated a serious interest in taking over your franchise location and joining the franchise formula. This document must be prepared in collaboration with the franchisor and must be customized to your specific location. Upon receiving the Pre-Contractual Information Document, the acquisition candidate is entitled to a stand-still period of four weeks during which they can work out the necessary plans and possibly seek external advice. Therefore, it is wise to start on time if you want to sell your franchise location. Experience shows that this process often takes longer than initially estimated, partly due to the stand-still period and other steps the acquisition candidate must take, such as going through the franchisor’s selection process and obtaining financing.

The Pre-Contractual Information Document consists of:

1. The franchise agreement to sign, including all attachments.
2. All fees and surcharges the franchisee must pay, including an explanation of what the franchisee receives in return.
3. An overview of the investments the prospective franchisee must make. A reference to the attached sales brochure suffices, as the acquisition price is explained there. If the prospective franchisee needs to make additional investments, such as partial replacement of inventory, this should also be included.
4. Further information about the franchise consultation and its frequency. This gives the franchisee a better understanding of how the consultation proceeds. The frequency indicates the involvement and level of input in the franchise formula.
5. Contact details of the representative body of the franchisees (if present).
6. The franchisor must provide information about the financial health of the central organization.
7. Financial information about your franchise location where the prospective franchisee will be active. Think of financial figures from the last three years, such as financial statements. If there are any financial peculiarities, it is wise to include an explanation.
8. All other potentially relevant information for the prospective franchisee.

The preparation of the sales brochure and the Pre-Contractual Information Document should be done carefully, as they are legal documents following the Franchise Act. Therefore, we advise you to have these prepared by an experienced consultant. For more information on preparing a sales brochure, you can contact us without obligation via the form below.