In this guide we cover everything you need to know to franchise safely: what Argentine law requires, why working with a registered trademark is essential, how to organize your know-how, and which points a franchise agreement cannot leave out.
Turning your business into a franchise lets you expand without having to open every new business unit yourself. It is a way to multiply your reach, get to more people, and strengthen your brand without losing control of what you have built.
Becoming a franchisee is an opportunity to start a business with the backing of an established brand, combining independence with a proven business model that maximizes your chances of success.
That said, franchising in Argentina is not simply “lending your name” or “using a well-known name.” There are legal requirements, commercial strategies, and many details to take into account to do it right without running unnecessary risks.
It is a “win-win” format, since it is a business agreement framed as a form of business collaboration, in which each party contributes its share to the success of the venture.
If you want your franchise to grow strong and with legal backing, this article is for you.
What is a franchise under Argentine law?
Argentina’s Civil and Commercial Code defines the franchise agreement in Section 1512 as follows:
“A commercial franchise exists when one party, called the franchisor, grants another, called the franchisee, the right to use a proven system designed to market certain goods or services under the franchisor’s trade name, emblem, or trademark, the franchisor providing a body of technical knowledge and continuous technical or commercial assistance, in exchange for direct or indirect consideration from the franchisee.”
Requirements for a “franchise” brand
The 3 essential requirements for creating a franchise are:
1. A registered trademark
You must have a trademark registered with the INPI (Argentina’s National Institute of Industrial Property). You cannot license what is not legally protected. A franchise without a registered trademark therefore has no legal backing.
The franchisor must hold a trademark registration certificate granted by the INPI. A pending application is not enough: the registration must have been granted.
2. Documented know-how
Manuals containing technical, commercial, and operational knowledge that convey:
- How the business is managed
- Quality standards
- Customer service
- Brand image and brand guidelines
- Operating procedures
The know-how must be part of a proven brand system that is useful, transferable, and protected by confidentiality clauses.
Training before opening is recommended, with documentation and technical support. Verbal training alone is not enough.
3. A proven business model
The law requires the system to have been implemented beforehand, with verifiable results. You cannot franchise an idea: it must be a real, working business.
Legal obligations of the franchisor (the “brand owner”)
Whoever offers a franchise takes on a series of legal responsibilities:
- Initial training on the business.
- Transferring technical knowledge – the know-how.
- Providing the franchisee with an operations manual.
- Technical and commercial support throughout the contractual relationship.
- Providing financial information in advance, covering at least two years of performance of similar units.
- Ensuring supply, if the model requires it.
In addition, the agreement must have a minimum term of four years, except in specific cases.
Offering a franchise without a registered trademark carries a high legal risk and can render the agreements void.
These are the elements the franchisor must provide to ensure the proper operation of the franchise while the agreement is in force. If they are not provided, the franchise may fail to meet the basic legal requirements.
Legal obligations of the franchisee (the one who “represents the brand”)
The franchisee is responsible for carrying out the commercial activity and reporting on it to the franchisor. The franchisee must refrain from any activity that damages the brand’s image and/or hinders inspections.
Confidentiality is a key point, tied to the commitment to protect the rights of the brand being represented. No confidential information may end up in the hands of third parties outside the franchisee or the franchisor.
The franchisee must therefore:
- Follow the guidelines in the operations manual.
- Provide information on how the business is performing and allow inspections.
- Not harm or damage the brand’s image or the reputation of the licensed trademark.
- Keep the know-how confidential.
- Pay the agreed fees.
It is important to clarify that the franchisee is not an employee of the franchisor.
What should a franchise agreement include?
Turning a brand into a franchise can be a powerful growth driver. But to do it safely, you need a clear, specific agreement tailored to the business model, prepared with the advice of intellectual property professionals.
The agreement must be made in writing and address the following points:
- Assigned territory: with or without exclusivity.
- Term of the agreement: it cannot be shorter than 4 years.
- Financial obligations: initial franchise fee, monthly royalties, operating costs.
- Confidentiality and intellectual property clauses.
- A description of the know-how and of the manuals to be delivered.
- Penalties for breach.
- The technical assistance the franchisor undertakes to provide.
- Indemnification clauses, to protect yourself if the franchisee faces legal claims.
- Recording the agreement with the INPI for stronger formal and legal backing.
Franchises are exclusive for both parties. The franchisor cannot authorize another franchise unit in the same territory without the franchisee’s consent.
The franchisee must operate from the designated premises, within the granted territory or, failing that, within its area of influence, and cannot operate, directly or through intermediaries, franchise units or activities that compete with the franchise. The parties may limit or exclude exclusivity.
More relevant information about a franchise agreement
Can you open a franchise if the trademark is not registered?
No. The law is clear: to grant the right to use a trademark, it must be registered with the INPI. Offering franchises without a registered trademark is not only illegal: it puts the franchisee at risk and can lead to the agreement being declared void.
What can’t a franchisor do?
The law sets clear limits so that both parties remain independent. The franchisor may NOT:
- Exercise operational control over the franchisee’s business.
- Make employment or administrative decisions on the franchisee’s behalf.
- Guarantee financial results. Profitability cannot be ensured by contract.
How does a franchisor make money?
Franchise agreements generally provide for three types of payments to the franchisor.
- For the right to use the registered trademark.
- For ongoing training, supply of equipment, and/or business consulting services.
- Ongoing royalties or a percentage of sales tied to operations.
Liability for consumer claims
Section 40 of the Consumer Protection Law states that every party involved in the commercial chain may be held liable for damage.
This means the franchisor may be affected even if it was not directly involved. For this reason, the agreement should provide mechanisms to limit liability and clearly define each party’s role.
Where is this regulated?
– Chapter 19 of the Civil and Commercial Code: Book Three, Title 4, Chapter 19, Sections 1512 to 1524
Conclusion
On the one hand, franchising your brand can be an excellent way to grow, but it requires legal and commercial planning. It is not just about “someone else using your name.” It is a business model based on structure, commitment, and legal backing.
If your brand is already working and you want to expand safely, start by consolidating your trademark and your rights, documenting your processes, and getting advice from intellectual property professionals.
On the other hand, opening a franchise can be a smart way to start a business with backing. But it is also a demanding contractual relationship, and it is essential to understand every commitment before taking the step.
As a franchisee, you will invest time, money, and energy in a business that already has established rules. Knowing them from the start will let you operate with more confidence, protect your investment, and plan for the long term.
A well-structured franchise is a brand that grows without losing control. Schedule a consultation with our intellectual property professionals and define the franchise agreement that best suits your needs.
