A familiar brand, a location that could open quickly and an operating model already used elsewhere can make a franchise proposal appealing. Before paying to join, translate that presentation into questions about documents, obligations and risks.
The initial fee is only one part of the decision. The relationship may last years, so the territory, supply arrangements, promised support, future payments and possible exit all deserve attention.
Brand rights and an operating system
Article 245 of Mexico’s Federal Law for the Protection of Industrial Property describes a franchise through a written trademark licence combined with technical knowledge or assistance for uniform operation under the trademark owner’s methods [1].
Separate the brand rights being granted from the operating system you will receive. Ask which uses are permitted, for which activity and subject to which limits. A sales presentation does not replace clear identification in the documents.
Allow time for pre-contractual review
Article 245 requires information about the company to be provided at least thirty days before the agreement is concluded, under the applicable regulatory terms [1]. Use that period to examine the proposal and resolve questions before taking on obligations.
Article 124 of the Regulations under the same Law, published in the DOF on 28 April 2026, develops this disclosure requirement [2]. When reviewing the proposal, request at least:
- The amounts and types of payments due to the franchisor (section V).
- The technical assistance and services the franchisor must provide (section VI).
- The franchise operating territory (section VII).
- General payment amounts and investment payback periods (section XII).
- The number of company-owned and franchised units (section XIII).
- The number of units opened, relocated, transferred and closed (section XIV).
The record of closures and transfers helps you examine what has happened within the network. Compare it with sales projections and ask for clarification of the information received.
Keep the received version, delivery date and attachments. If the proposal changes, identify which document was replaced. Lawyers, accountants and the future operator can then review the same information.
False disclosure has specific consequences. Article 245 allows the franchisee to seek nullity of the agreement and claim resulting damages. The damages claim may be brought within one year of the agreement being concluded; after that period, the article allows only the nullity claim [1].
Territory and sales channels
Request a map or definition that makes the operating territory clear. Then ask how it relates to other units, online sales, deliveries and corporate accounts.
Do not infer exclusivity from the distance to the nearest outlet. If territorial protection is offered, examine its scope, duration and conditions. A practical example helps: how would an online sale by the brand to a customer in your territory be treated? The documents should provide an answer.
Total investment and continuing payments
Build your own review sheet separating the initial fee, premises improvements, equipment, inventory, working capital and periodic payments. Compare it with the proposal. Identify estimates, defined obligations and items that still need quotations.
Ask how royalties or other payments are calculated and what their calculation base includes. Review due dates, reporting requirements and consequences of late payment. Keep the assumptions behind a profitability projection, such as location, sales, costs and the operator’s participation. A projection should not be treated as an income guarantee.
Supply, training and assistance
Turn promises of support into specific questions. What does initial training cover, who participates, are there extra costs, and how can assistance be requested after opening? Distinguish included services from optional ones.
For supply, identify required vendors, change notifications and the procedure for shortages. Article 246 requires a written agreement addressing matters including territory, investment, inventory, payments, training, supervision and termination [1].
Renewal, changes and exit
Read the relationship from its beginning to its conclusion. Examine the term, renewal conditions, termination grounds and continuing obligations. If equipment or brand-image changes are contemplated, ask how they will be communicated and who will pay.
If you plan to sell the business to a third party, review approvals, documents and effects on the agreement and premises. Article 247 limits the franchisor’s involvement to ensuring the agreed administration and brand-image standards [1].
Its second paragraph addresses corporate changes such as mergers, demergers and share transfers. It covers changes to personal characteristics of the franchisee that the agreement treated as decisive to entering the franchise relationship. Before negotiating the transaction, have that condition checked against your documents.
Distinguish a sale of assets from a transfer of shares. Under Article 246, the franchisee does not have to sell its assets to the franchisor or its designee at the end of the agreement, unless otherwise agreed. Nor must the franchisee transfer company shares to the franchisor or make it a shareholder at any time, unless otherwise agreed [1]. Look specifically for those clauses.
For early termination, Article 249 requires compliance with the agreed grounds and procedures. Unilateral termination or rescission is limited to the statutory cases: an indefinite term or just cause. Breaching these rules can lead to agreed contractual penalties or, instead, compensation for resulting damages [1].
At closure, identify which brand uses must cease and which materials must be returned. The confidentiality obligation in Article 248 continues after the agreement ends [1].
Assemble a file before deciding
Bring together pre-contractual information, the proposed agreement, attachments, party identification, trademark documentation and the financial proposal. Include sales promises that influenced your decision and ask whether they were incorporated into the agreement.
IMPI provides a procedure for recording a licence or franchise [3]. Review its relevance to the file; recording should not be confused with an approval of business profitability.
QP Abogados can review the contractual structure and identify points requiring clarification before signature. Putting questions into writing supports a fuller view of the investment and the relationship being accepted.
This article is general information. Reviewing a franchise requires examining its documents and the specific circumstances of the parties.