Franchise Disclosure and Liability for Earnings Claims in Turkey

on July 21, 2026

Introduction

Prospective franchisees commonly make their investment decisions based on information supplied by the franchisor.

Before signing the agreement, the franchise candidate may receive presentations, financial models, store-opening budgets, turnover estimates, profit projections, payback-period calculations and examples from existing outlets.

These materials may determine whether the candidate:

Pays the initial franchise fee;
Establishes a new company;
Signs a long-term commercial lease;
Borrows money;
Provides a personal guarantee;
Purchases mandatory equipment;
Leaves an existing business;
Commits to opening several outlets.

Statements concerning expected revenue, operating profit, investment recovery and outlet performance are therefore among the most important representations made during the franchise sales process.

They are also among the most dangerous.

A statement such as “the investment will return within eighteen months” may be understood as a commercial estimate, a target, an opinion, a factual representation or a binding guarantee depending on the wording, context, data and conduct of the parties.

A franchisor may intend only to present an illustrative business model. The franchise candidate may understand the same presentation as confirmation that similar results are normally achieved by outlets operating under the system.

The legal issue becomes more serious where the franchisor:

Selects only its highest-performing outlets;
Omits closed or unsuccessful locations;
Presents gross revenue as profit;
Excludes rent, labour or financing costs;
Uses outdated data;
Conceals mandatory expenses;
Describes assumptions as established facts;
Promises a guaranteed payback period;
Pressures the candidate to sign before examining the figures.

Türkiye does not currently have a standalone franchise disclosure statute requiring franchisors to deliver a prescribed Franchise Disclosure Document before every franchise sale. Turkish law likewise does not create a franchise-specific remedy solely because a statutory disclosure document was not provided. Franchise relationships are instead assessed under the general principles of contract, good faith, misrepresentation, unfair competition and liability law.

The absence of a statutory Franchise Disclosure Document does not mean that a franchisor may provide inaccurate information or conceal material facts without legal consequences.

False earnings claims may result in allegations of fraud, fundamental mistake, breach of contract, pre-contractual liability, tort and unfair competition. Depending on the facts, the franchisee may seek to avoid the agreement, recover payments, claim damages, require correction of misleading statements or terminate the relationship.

This article examines franchise disclosure and liability for earnings claims in Turkey and explains how franchisors and franchisees should manage financial representations during the investment process.

Is There a Mandatory Franchise Disclosure Document in Turkey?

Unlike jurisdictions that require a standardised Franchise Disclosure Document, Turkish law does not currently impose a general statutory form that every franchisor must deliver to a franchise candidate.

There is no universal rule requiring delivery of a prescribed document containing a mandatory list of items, a specific disclosure deadline or a franchise-specific cooling-off period.

This means that failure to deliver an American-style or Canadian-style disclosure document does not, by itself, automatically invalidate a Turkish franchise agreement.

The parties may nevertheless create their own contractual disclosure procedure.

A franchise agreement, letter of intent or confidentiality agreement may require the franchisor to provide specified information before signing. Failure to provide that contractually promised information may then constitute breach of an express obligation.

International franchisors may also choose to provide their existing disclosure document voluntarily.

Where a foreign disclosure document is used in Türkiye, it should be adapted rather than delivered without review. Foreign documents may contain:

References to foreign legislation;
Fees that do not apply in Türkiye;
Performance figures from different markets;
Foreign labour and rental assumptions;
Currency calculations unrelated to Turkish conditions;
Dispute notices that have no Turkish equivalent.

Providing an unadapted document may create a misleading impression that the disclosed costs, performance or legal rights apply directly to the Turkish investment.

The General Duty of Good Faith

The absence of a special franchise disclosure statute does not eliminate the general duty to act honestly.

Article 2 of the Turkish Civil Code requires every person to comply with the rules of good faith when exercising rights and performing obligations. The legal order does not protect the clear abuse of a right. These principles extend throughout private-law relationships and support duties of honesty and care during contractual negotiations.

During serious franchise negotiations, the parties are not complete strangers free to mislead one another.

As negotiations progress, each side may reasonably rely on the other for information that is uniquely within that party’s control.

The franchisor ordinarily has superior access to information concerning:

The historical performance of the network;
Outlet closures;
Franchisee disputes;
Mandatory supplier costs;
Average development expenses;
Advertising contributions;
Technology charges;
Operational requirements;
Planned changes to the franchise system.

The prospective franchisee has its own responsibility to investigate the investment. However, due diligence does not authorise the franchisor to answer questions inaccurately or conceal information that makes its affirmative statements misleading.

A franchisor that chooses to provide financial information should ensure that the information is accurate, current, complete in all material respects and presented in a manner that does not create a false impression.

What Is an Earnings Claim?

An earnings claim is any written, oral, visual or electronic statement concerning the actual or potential financial performance of a franchise business.

It may relate to:

Turnover;
Gross sales;
Gross margin;
Operating profit;
EBITDA;
Net profit;
Payback period;
Customer numbers;
Average transaction value;
Break-even point;
Return on investment;
Cash flow;
Required working capital;
Owner income.

An earnings claim does not need to contain an exact guarantee.

Statements such as the following may influence the investment decision:

“Most outlets recover the investment in twelve months.”
“This location should generate TRY 5 million each month.”
“The net profit margin is normally twenty percent.”
“No franchisee has ever lost money.”
“The concept is recession-proof.”
“The outlet will be profitable from the first month.”
“The investment amount includes every opening cost.”
“You will earn more than your current salary.”

The statement may be made through:

Franchise brochures;
Websites;
Social-media advertisements;
Investor presentations;
WhatsApp messages;
E-mails;
Spreadsheets;
Video conferences;
Meetings;
Existing outlet tours;
Statements by sales consultants.

Under the Code of Civil Procedure, written and printed texts, photographs, audio and video recordings and electronic data capable of proving disputed facts qualify as documents. Messages, presentation files, recordings and electronic spreadsheets may therefore become important evidence in an earnings-claim dispute.

Historical Results Versus Financial Projections

A legally sound disclosure process should distinguish historical facts from future projections.

Historical Financial Performance

Historical figures describe results already achieved by one or more operating outlets.

Examples include:

Average annual turnover for 2025;
Median gross margin of mature outlets;
Actual opening cost of company-owned branches;
Number of outlets reaching break-even during a specified period.

Historical claims should be supported by records.

The presentation should explain:

Period covered;
Number of outlets;
Whether the outlets are franchised or company-owned;
Whether the figures were audited;
Whether the results are average, median or range;
Whether closed outlets are included;
Which costs were deducted.

Future Financial Projection

A projection estimates performance that has not yet occurred.

It depends on assumptions concerning:

Location;
Rent;
Customer traffic;
Prices;
Inflation;
Staffing;
Financing;
Opening date;
Competition;
Local demand;
Franchisee management.

A projection should be described clearly as an estimate based on assumptions rather than an assured outcome.

The fact that a forecast is labelled “projection” does not protect the franchisor if the underlying figures are invented, outdated or based on assumptions known to be unrealistic.

The Difference Between Turnover and Profit

One of the most frequent sources of misunderstanding is the failure to distinguish sales from profit.

High gross sales do not necessarily produce a profitable franchise outlet.

A turnover presentation may exclude:

Cost of goods;
Royalties;
Advertising contributions;
Rent;
Common expenses;
Employee wages;
Social security;
Utilities;
Delivery-platform commissions;
Technology fees;
Interest;
Depreciation;
Taxes;
Owner salary;
Product waste.

A statement that an outlet generated TRY 20 million in annual sales does not explain whether the outlet earned a profit.

When a franchisor presents profitability, the calculation should identify each deduction and accounting concept.

Expressions such as “net profit,” “operating profit,” “store contribution” and “EBITDA” should not be used interchangeably.

The disclosure should also clarify whether the figures include or exclude VAT and whether the calculation is made before or after financing and taxation.

Average Results Can Be Misleading

An average may conceal substantial variation.

Assume that five outlets generated annual sales of:

TRY 5 million;
TRY 6 million;
TRY 7 million;
TRY 8 million;
TRY 30 million.

The average is TRY 11.2 million, although four of the five outlets earned substantially less.

The median would be TRY 7 million and may provide a more representative indication of the ordinary outlet.

A fair presentation may therefore include:

Average;
Median;
Highest and lowest results;
Quartiles;
Number of outlets below break-even;
Number of closed outlets;
Age of the outlets.

The franchisor should avoid selecting only flagship locations where the candidate reasonably believes that the figures represent the network generally.

Mature Outlets and Newly Opened Outlets

A newly opened outlet may not perform like an established branch.

Financial data should explain whether it relates to:

First-year outlets;
Outlets open for at least twelve months;
Mature outlets open for three years;
Flagship stores;
Shopping-centre stores;
Street locations;
Delivery-only locations.

A model based only on mature outlets may understate the working capital required during the opening period.

The franchisee should receive information sufficient to understand:

Ramp-up period;
Initial losses;
Seasonal variation;
Opening campaign costs;
Time needed to build repeat customers.

Company-Owned and Franchised Outlets

Company-owned outlet results may differ from franchise outlet results.

The franchisor may benefit from:

Central purchasing;
Shared management;
No royalty charge;
Different rent arrangements;
Group-level marketing;
Access to cheaper financing;
Central staff.

If company-owned performance is used to promote a franchise investment, these differences should be disclosed.

The presentation should identify whether royalties and franchise-specific fees have been added hypothetically to the company-owned outlet results.

Geographic and Economic Differences

Financial data from another country or region may not be directly relevant to Türkiye.

Differences may arise from:

Currency;
Purchasing power;
Labour costs;
Rent;
Tax;
Customs duties;
Supplier prices;
Consumer habits;
Delivery-platform usage;
Competition.

A foreign franchisor should not present its home-market figures as if they were verified Turkish results.

Where no Turkish outlet exists, the candidate should be told expressly that the system has not yet produced local operating history.

Projections should explain which assumptions were adapted for the Turkish market and which remain uncertain.

Site-Specific Earnings Claims

The greatest risk often arises when the franchisor comments on a specific proposed location.

A general network average is different from a statement that a particular property will generate a defined turnover.

A site-specific estimate may depend on:

Foot traffic;
Shopping-centre occupancy;
Visibility;
Parking;
local demographics;
Competitors;
Rent;
Delivery radius;
Opening hours.

The franchisor should identify the source of the site data.

It should also clarify whether its site approval means:

Brand approval only;
Commercial suitability;
Technical approval;
Financial forecast;
Profit guarantee.

Site approval should not be described as a guarantee of financial success unless the franchisor genuinely intends to assume that contractual risk.

Material Information That Should Be Disclosed

Although Turkish law does not prescribe a universal franchise disclosure list, a prudent franchisor should provide material information relevant to the investment decision.

Depending on the franchise system, disclosure may include:

Corporate and Brand Information

Identity of the franchisor;
Group companies;
Trademark ownership;
Licence rights;
Duration of the principal brand rights;
Authority to grant the Turkish franchise.

Franchise Network

Number of operating outlets;
Number of franchised and company-owned outlets;
Openings and closures;
Transfers;
Terminations;
Planned expansion.

Financial Requirements

Initial franchise fee;
Development fee;
Equipment;
Fit-out;
Lease deposit;
Opening inventory;
Training;
Technology;
Working capital;
Renewal and transfer fees.

Continuing Payments

Royalty;
Advertising contribution;
Technology fee;
Supplier charges;
Audit costs;
Mandatory renovation expenditure.

Supply Arrangements

Mandatory suppliers;
Affiliated suppliers;
Price-setting method;
Rebates or commissions;
Import and currency risks;
Minimum order quantities.

Territory and Sales Channels

Exclusivity;
Corporate outlets;
E-commerce;
Delivery platforms;
National accounts;
Reserved channels.

Legal and Operational Risks

Required licences;
Lease risks;
Development schedule;
Personal guarantees;
Post-term restrictions;
Termination consequences.

Not every omission creates liability. The central question is whether the omitted fact was material and whether silence, combined with the franchisor’s statements, created an inaccurate overall impression.

Liability for Fraudulent Misrepresentation

Article 36 of the Turkish Code of Obligations provides that a party induced to enter a contract through the other party’s fraud is not bound by the agreement, even where the resulting mistake would not otherwise be considered fundamental. Fraud by a third person may also affect the contract where the other contracting party knew or should have known of the fraud.

Fraud may involve an affirmative false statement.

It may also arise through deliberate concealment where there is a duty to disclose the concealed fact.

Examples may include:

Fabricating outlet turnover;
Altering financial statements;
Describing a closed outlet as operating;
Concealing that most franchisees are in default;
Stating that a trademark is owned when the licence has ended;
Hiding mandatory fees while presenting a complete investment budget;
Promising an exclusive territory while negotiating with another franchisee.

A fraud claim generally requires more than proving that the business performed below expectations.

The franchisee must connect the misleading conduct to its decision to enter the agreement.

Time Limit for Avoiding the Contract

A party relying on mistake or fraud must act promptly.

Under Article 39 of the Turkish Code of Obligations, a person who does not notify the other party within one year after learning of the mistake or fraud that it does not wish to remain bound—or does not seek return of what it gave—is treated as having confirmed the contract.

Confirmation of a contract affected by fraud does not automatically eliminate a separate damages claim arising from the fraud.

A franchisee that discovers false earnings data should therefore avoid continuing for a long period without reserving its rights.

Relevant dates may include when the franchisee:

Received actual outlet accounts;
Discovered undisclosed fees;
Learned that comparison outlets did not exist;
Obtained the original spreadsheet;
Learned that figures had been altered.

The one-year period for the avoidance declaration should not be confused automatically with every limitation period applicable to damages or other claims.

Fundamental Mistake

Article 30 provides that a party falling into a fundamental mistake when entering the contract is not bound by it.

Article 32 states that a mistake concerning motive is not normally fundamental. However, it may be treated as fundamental where the mistaken motive formed the basis of the contract, treating it as such accords with good faith in commercial relations and the other party could recognise that importance.

A franchisee may argue that it entered the agreement based on a fundamental mistake concerning:

Required investment;
Existence of exclusive rights;
Actual network performance;
Mandatory operating costs;
Number of competing outlets;
Availability of an operating licence.

A simple disappointment concerning future profit is less likely to establish fundamental mistake than a false statement concerning an existing material fact.

The franchisee’s own commercial experience and due diligence will also be relevant.

Contractual Liability

Financial representations may become express contractual obligations.

This can occur where the franchise agreement states that:

The franchisor guarantees a minimum turnover;
The franchisor warrants the accuracy of an attached disclosure schedule;
A specified maximum investment cost will not be exceeded;
The franchisor will reimburse any excess fit-out cost;
A minimum number of customer leads will be provided.

If an express contractual promise is not performed, Article 112 requires the debtor to compensate the resulting loss unless it proves that no fault can be attributed to it.

Most franchisors do not intend to guarantee profitability.

The agreement should therefore distinguish clearly between:

Binding warranties;
Historical facts;
Good-faith estimates;
Non-binding business plans;
Aspirational targets.

A disclaimer should not contradict a clear promise made elsewhere in the document.

Pre-Contractual Liability

Negotiations may create liability even before the franchise agreement is executed.

The principle of good faith requires parties conducting serious negotiations to avoid deliberately providing false information, creating unjustified reliance or concealing material facts in circumstances where disclosure is reasonably required. This framework is commonly associated with pre-contractual liability.

Possible reliance losses may include:

Legal and accounting fees;
Travel;
Market research;
Company formation;
Lease reservation payment;
Design costs;
Financing expenses;
Initial franchise payment.

The exact measure of loss depends on the legal basis, causation and the circumstances.

The claimant should not automatically receive every expected profit from the franchise merely because negotiations were conducted improperly.

Tort Liability

Article 49 of the Turkish Code of Obligations provides that a person who causes damage through a wrongful and culpable act must compensate the injured party. It also imposes liability for intentionally causing damage through conduct contrary to morality even if no specific prohibitory rule applies.

An intentionally falsified earnings presentation may potentially support both contractual and tort-based arguments, depending on the parties, timing and nature of the conduct.

Article 50 places the burden of proving damage and fault on the injured party. Where the precise amount of damage cannot be proven, the court may estimate it according to the ordinary course of events and the measures taken by the injured person.

Unfair Competition Liability

The Turkish Commercial Code provides another important basis for claims involving misleading franchise sales.

Article 54 states that deceptive conduct and commercial practices affecting relationships among competitors or between suppliers and customers are unfair and unlawful.

Article 55 lists false or misleading statements concerning one’s business, activities, prices, sales campaigns and commercial relationships among the principal examples of unfair competition. Concealing characteristics, benefits or risks in a manner that misleads customers may also constitute unfair conduct.

A misleading franchise investment advertisement may therefore be examined not only as a contractual issue but also as a commercial practice affecting the candidate’s economic decision.

Under Article 56, a person whose commercial activity or economic interests are damaged or threatened may seek:

Declaration that the conduct is unlawful;
Prevention of the conduct;
Removal of the resulting situation;
Correction of false or misleading statements;
Damages where fault exists;
Moral damages where the legal conditions are satisfied.

The court may, in appropriate circumstances, award an amount corresponding to the benefit the defendant was likely to obtain through the unfair competition.

Unfair competition claims are subject to a relatively short limitation period. Article 60 provides for one year from learning of the claim and, in any event, three years from its origin, unless the conduct also constitutes an offence carrying a longer limitation period.

Does Consumer Protection Law Apply?

A prospective franchisee normally enters the transaction for commercial or professional purposes.

The Consumer Protection Law defines a consumer as a person acting for purposes outside commercial or professional activity. A person purchasing a franchise to operate a business will therefore generally not qualify as a consumer in relation to that investment.

For this reason, the principal legal framework for a misleading earnings claim will generally be commercial and contract law rather than consumer law.

The position may differ where the same advertising also makes claims directed at ordinary consumers concerning the products or services offered by the brand.

Commercial advertisements aimed at consumers must comply with the advertising and unfair commercial practices rules, and advertisers may be required to substantiate objective claims.

The Franchisee’s Duty of Due Diligence

The franchise candidate cannot place the complete investment-analysis burden on the franchisor.

Franchisees usually act as merchants or intend to establish commercial enterprises.

Article 18 of the Turkish Commercial Code requires merchants to act as prudent businesspeople in their commercial activities.

A prospective franchisee should therefore:

Review financial assumptions;
Visit existing outlets;
Speak with franchisees where possible;
Examine leases;
Investigate licences;
Obtain independent tax and legal advice;
Test cost estimates;
Prepare sensitivity scenarios;
Verify available working capital.

Failure to conduct reasonable due diligence may affect the assessment of reliance, causation and contributory conduct.

However, the prudent-merchant standard does not give a franchisor permission to provide fabricated records.

A candidate is not required to assume that every document supplied by the brand has been falsified.

Earnings Disclaimers

A properly drafted disclaimer can reduce misunderstanding.

It may state that:

Figures are historical or illustrative;
No profit is guaranteed;
Results vary by location and operator;
The candidate must obtain independent advice;
Assumptions may change;
The franchisor does not control rent, financing or market demand.

A disclaimer is useful only when it is consistent with the rest of the sales process.

A franchisor cannot make a firm oral promise, provide a spreadsheet labelled “guaranteed profit,” pressure the candidate to sign and then rely on a hidden paragraph stating that no representation was made.

Entire Agreement and Non-Reliance Clauses

Franchise agreements commonly state that the written contract contains the complete agreement and that the franchisee has not relied on any representation outside it.

These clauses can help identify the agreed contractual record.

They are not an unlimited shield against intentional fraud, misleading conduct or undisclosed standard terms.

Articles 20 to 25 of the Turkish Code of Obligations regulate terms prepared unilaterally for repeated use.

Adverse standard terms enter the agreement only where the drafting party clearly informed the other party, provided an opportunity to learn their content and obtained acceptance. Ambiguous terms are interpreted against the drafter. Clauses authorising unilateral adverse amendments may be treated as unwritten, and standard terms may not aggravate the counterparty’s position contrary to good faith.

A non-reliance clause should therefore be:

Visible;
Understandable;
Consistent with negotiations;
Specific about the representations excluded;
Signed after the candidate receives the complete materials.

The strongest protection is not a broad disclaimer. It is an accurate and documented disclosure process.

Liability for Statements Made by Sales Personnel

Franchise sales are often conducted through:

Employees;
Regional managers;
Brokers;
Development consultants;
Master franchisees;
Independent lead generators.

The franchisor should define who is authorised to make financial representations.

Sales personnel should not create their own payback promises to close a transaction.

Where an employee or representative supplies misleading information within the sales process, the franchisor may face claims based on representation, employer responsibility, contract or unfair competition.

The Turkish Commercial Code also permits specified unfair competition actions against employers where the conduct was committed by employees or workers in the course of their duties.

Independent consultants should be required to:

Use approved materials;
Preserve records;
Avoid guarantees;
Disclose commissions;
Refer financial questions to authorised personnel.

The candidate should be told expressly where the intermediary acts independently and cannot bind the franchisor.

Evidence in an Earnings-Claim Dispute

The claimant should preserve every part of the sales process.

Important evidence may include:

Advertisements;
Brochures;
Investor decks;
E-mails;
WhatsApp messages;
Spreadsheets;
Audio recordings obtained lawfully;
Meeting notes;
Witnesses;
Draft agreements;
Bank records;
Lease documents;
Actual sales reports;
Existing outlet records.

The burden of proving the facts generally belongs to the party seeking a legal result from those facts. The claimant should specify what representation was made, who made it, when it was made, why it was false and how it affected the investment decision.

The claimant should compare the representation with the true position.

For example:

Representation	Alleged Actual Position
Average turnover was TRY 10 million	Median turnover was TRY 5.5 million
Investment cost was TRY 4 million	Mandatory cost reached TRY 7 million
Payback was twelve months	No comparable outlet repaid within three years
Territory was exclusive	Another franchise was already planned
Net margin was 20%	Figure excluded royalty, rent and labour

Production of Franchisor Records

A franchisee may not possess the data needed to prove that a network average was false.

Relevant documents may remain with the franchisor.

Under Articles 219 and 220 of the Code of Civil Procedure, parties must produce documents in their possession relied upon by themselves or the opposing party.

Where the court concludes that a requested document is necessary and in the other party’s possession, it may grant a definitive period for production. Failure to produce it without an acceptable justification may allow the court, depending on the circumstances, to accept the other party’s statement concerning its contents.

Potential disclosure requests may concern:

Outlet performance tables;
Source spreadsheets;
Closure lists;
Franchisee reports;
Company-owned outlet accounts;
Internal investment budgets;
Previous versions of presentations;
Communications with the sales representative.

Requests should be specific and connected with the disputed statement rather than seeking unrestricted access to the franchisor’s complete business.

Establishing Reliance and Causation

A false statement does not automatically establish every claimed loss.

The franchisee should show that the representation materially influenced the decision to invest.

Relevant questions include:

Was the claim made before signing?
Was it specific?
Was it repeated?
Was it included in the business plan?
Did the franchisee communicate that the figure was decisive?
Did the agreement contradict the representation clearly?
Did later independent advice identify the risk?
Would the franchisee have invested anyway?

The franchisor may argue that the loss resulted from:

Poor management;
Excessive rent;
Inadequate capital;
Local competition;
Failure to follow the system;
Economic conditions;
Incorrect site selection;
Franchisee misconduct.

Financial expertise may be necessary to separate losses caused by the misrepresentation from losses caused by later operational factors.

Available Remedies

The appropriate remedy depends on the legal basis and the franchisee’s objective.

Possible remedies include:

Declaration of Non-Binding Effect

Where fraud or fundamental mistake is established and the statutory procedure is followed, the franchisee may declare that it does not wish to remain bound.

Restitution

The parties may need to return payments or benefits following the unwinding of the relationship.

Possible items include:

Initial franchise fee;
Development fee;
Deposits paid to the franchisor;
Equipment held by the other party.

Damages

The franchisee may seek compensation for losses caused by the misconduct.

Potential heads of loss may include:

Wasted professional fees;
Unrecoverable fit-out expenditure;
Finance costs;
Lease liabilities;
Franchise fees;
Equipment loss;
Operating losses;
Lost alternative opportunity.

Lost future profits require particularly careful proof.

A business that never operated profitably cannot simply claim every profit shown in the disputed projection as guaranteed loss unless a binding guarantee existed.

Correction and Prevention

Unfair competition claims may support correction of false investment advertisements and prevention of their continued use.

Contractual Termination

Where the conduct also constitutes a material contractual breach, the franchisee may pursue termination subject to the agreement and general rules.

Damages Claimed by the Franchisor

A franchisor may argue that the franchisee terminated improperly and claim:

Unpaid royalties;
Contractual penalties;
Future fees;
De-branding costs;
Damages.

The franchisee may respond that the agreement was induced by fraud, affected by fundamental mistake or terminated due to the franchisor’s prior breach.

The timing and wording of the franchisee’s notices become critical.

A franchisee should avoid sending a simple message stating only that the business is unprofitable.

It should identify the allegedly false statements, supporting evidence and legal rights being reserved.

Drafting a Franchise Disclosure Document Voluntarily

Even though Turkish law does not require a statutory FDD, a voluntary disclosure document offers important benefits.

It creates one controlled record of the information supplied before signing.

A Turkish disclosure document may contain:

Franchisor identity and corporate structure;
Trademark and intellectual property rights;
Franchise system history;
Litigation and insolvency information;
Initial investment;
Continuing fees;
Suppliers and rebates;
Territory and online sales;
Development obligations;
Existing and former franchisees;
Financial performance representations;
Principal contract terms;
Guarantees and security;
Acknowledgment of receipt.

The document should be delivered sufficiently early for meaningful review.

Delivery moments before signing weakens its disclosure function.

Rules for Preparing Earnings Claims

A franchisor that decides to make an earnings claim should follow a documented methodology.

The presentation should identify:

Source of data;
Date of data;
Sample size;
Outlet categories;
Average and median;
Highest and lowest results;
Period of operation;
Costs included;
Costs excluded;
Assumptions;
Material limitations.

The franchisor should preserve the supporting records.

The figures should be reviewed periodically and withdrawn when they become outdated.

Sales personnel should not modify approved data informally.

Sample Earnings Claim Disclaimer

The following wording is illustrative and should be adapted to the specific disclosure:

The financial information in this document is provided solely as an illustration based on the historical results of the outlets and periods expressly identified. It is not a guarantee, warranty or promise of the turnover, profit, cash flow or investment return that any prospective franchisee will achieve.
Actual results may vary materially according to location, rent, financing, staffing, management, competition, pricing, operating costs, market conditions, compliance with the franchise system and other factors.
The figures should be reviewed together with the assumptions and exclusions stated in this document. The prospective franchisee is responsible for preparing its own business plan and obtaining independent legal, tax, accounting and financial advice.

This wording does not cure false data.

The franchisor should not rely on a disclaimer to excuse a statement that it knows is inaccurate.

Recommendations for Franchisors

A franchisor should:

Create a written disclosure process;
Appoint authorised persons to provide financial information;
Prohibit unapproved oral earnings promises;
Distinguish turnover from profit;
Identify company-owned outlet data;
Include closed and underperforming units where relevant;
Use both average and median figures;
Explain assumptions and exclusions;
Update figures regularly;
Preserve supporting evidence;
Disclose mandatory costs;
Use clear disclaimers;
Give the candidate time for independent review;
Record questions and answers in writing;
Correct mistakes immediately.

The franchisor should also examine whether its website and social-media campaigns contain broad statements such as “guaranteed profit” or “risk-free investment.”

Recommendations for Franchise Candidates

A prospective franchisee should:

Request all financial claims in writing;
Ask for the source data;
Examine median rather than only average sales;
Ask how many outlets closed;
Speak with current and former franchisees;
Prepare its own business plan;
Test pessimistic scenarios;
Verify rent and labour assumptions;
Include working capital;
Review mandatory supplier pricing;
Avoid relying only on payback claims;
Obtain independent professional advice.

The franchisee should not sign a receipt stating that no earnings claim was made if substantial financial promises were made during negotiations.

The discrepancy should be corrected before signing.

Franchise Earnings Claim Checklist

Before presenting or relying on financial-performance information, the parties should confirm that:

The statement is identified as historical fact or projection.
The relevant period is stated.
The sample size is disclosed.
Franchised and corporate outlets are separated.
Mature and new outlets are separated.
Closed outlets are considered.
Average and median are distinguished.
Gross sales and net profit are distinguished.
VAT treatment is clear.
Royalties are deducted where profit is shown.
Advertising contributions are deducted.
Rent and common expenses are included.
Labour and social security costs are included.
Delivery commissions are addressed.
Financing costs are identified.
Owner salary is addressed.
Working capital is disclosed.
Currency and inflation assumptions are current.
Site-specific assumptions are documented.
No guarantee is implied unintentionally.
Supporting records are preserved.
Sales representatives use approved materials.
Oral questions are answered in writing.
The candidate receives sufficient review time.
The final agreement is consistent with the disclosures.
Non-reliance clauses are visible and understandable.
Corrections are delivered before signing.
Foreign-market data are identified as such.
Professional advice is recommended.
The disclosure receipt is dated and signed.

Conclusion

Franchise disclosure and liability for earnings claims in Turkey are governed by a combination of general legal principles rather than a dedicated franchise disclosure statute.

A franchisor is not currently required to deliver a standard statutory Franchise Disclosure Document in every Turkish franchise transaction.

This does not remove responsibility for information that the franchisor chooses to provide.

Earnings claims influence substantial commercial decisions. A candidate may borrow money, sign a lease, provide personal security and commit its savings based on the projected performance of the business.

Historical results should therefore be accurate and capable of verification. Projections should be identified as estimates and should disclose their assumptions.

Average turnover should not be presented without sample size, outlet maturity and performance range. Gross sales should not be described as profit. Company-owned outlet results should not be used without accounting for costs borne only by franchisees.

A deliberately false earnings claim may support a claim based on fraud under Article 36 of the Turkish Code of Obligations.

A fundamental misunderstanding concerning an essential basis of the transaction may support mistake-based remedies under Articles 30 and 32.

Where the representation became a contractual warranty, failure to satisfy it may create contractual liability under Article 112.

Intentionally or negligently misleading conduct may also raise tort and unfair competition issues.

The Turkish Commercial Code expressly treats false and misleading statements concerning a business and its commercial activities as potential unfair competition and provides remedies including correction, prevention and damages.

The franchise candidate’s merchant status remains important.

A prudent investor should conduct independent due diligence and should not treat every optimistic forecast as a guarantee.

However, the duty of commercial care does not excuse fabricated figures or deliberate concealment.

Disclaimers and entire-agreement clauses may reduce misunderstanding, but they should be visible, consistent and supported by an honest sales process.

The strongest legal protection for a franchisor is not a sentence stating that the franchisee relied on nothing.

It is a disclosure record demonstrating that material information was presented accurately, supported by evidence and reviewed by the candidate before the investment was made.

Frequently Asked Questions

Is a Franchise Disclosure Document mandatory in Turkey?

No general Turkish statute currently requires every franchisor to provide a prescribed FDD before signing.

Can franchisors refuse to provide all information?

There is no universal statutory disclosure list, but misleading statements and material concealment may create liability under general legal principles.

What is an earnings claim?

It is any statement concerning actual or expected sales, profit, margins, payback, cash flow or other financial performance.

Are oral earnings claims relevant?

Yes. Oral statements may be relevant, although they can be more difficult to prove than written representations.

Is a turnover estimate a profit guarantee?

No. Turnover and profit are different concepts. The wording and context determine whether any guarantee was given.

Can the franchisor provide average outlet sales?

Yes, but the sample, period, outlet types, exclusions and range should be explained.

Should closed outlets be included?

Their exclusion may be misleading where the data are presented as representative of the complete network.

Can the franchisor use foreign outlet data?

Yes, provided that the foreign source and limitations are explained clearly.

Can company-owned outlet data be used?

Yes. Differences in royalties, management, rent, purchasing and central costs should be disclosed.

Is a financial projection legally binding?

Not automatically. It may become binding where it is drafted as an express warranty or guarantee.

What is fraudulent misrepresentation?

It involves inducing the other party to contract through intentional deception or material concealment.

Can the franchisee avoid the agreement for fraud?

Potentially. Article 36 provides that a party induced by fraud is not bound, subject to the applicable legal procedure and time limits.

How long does the franchisee have to rely on fraud?

Article 39 requires notification within one year after learning of the fraud for the avoidance right.

Does confirmation eliminate every damages claim?

No. Article 39 states that confirmation of a contract affected by fraud does not automatically eliminate the damages claim.

Can mistake be claimed where the outlet is simply unsuccessful?

Business failure alone does not establish fundamental mistake. The mistake must concern a legally significant basis of the agreement.

Can misleading earnings claims constitute unfair competition?

Yes. False or misleading statements concerning a business or commercial activity may fall within the Turkish Commercial Code’s unfair competition provisions.

What remedies exist under unfair competition law?

Possible remedies include declaration, prevention, correction, removal of consequences and damages.

Is the franchisee treated as a consumer?

Usually not, because the franchise is acquired for commercial or professional activity.

Does the franchisor have to guarantee profit?

No. A franchisor should avoid guarantees unless it intends to assume that obligation expressly.

Does a disclaimer protect the franchisor?

It may clarify that results are not guaranteed, but it does not protect knowingly false or misleading data.

Is an entire-agreement clause enforceable?

It may help define the contract, but it is not an unlimited defence against fraud, misleading conduct or invalid standard terms.

What evidence should the franchisee preserve?

Presentations, messages, e-mails, spreadsheets, recordings obtained lawfully, draft contracts, advertisements and financial records should be preserved.

Can the court order the franchisor to produce performance data?

The court may order relevant documents to be produced where the statutory conditions are satisfied.

Can the franchisee claim the projected profit as damages?

Not automatically. Lost profit must be proven, and a non-binding projection is not necessarily a guaranteed return.

Can the franchisee recover the initial fee?

Potentially, depending on avoidance, restitution, termination, causation and the applicable legal ground.

Can the franchisor be liable for a broker’s statement?

Possibly, depending on the broker’s authority, the franchisor’s knowledge, representation and the surrounding circumstances.

Should disclosure be translated into Turkish?

A Turkish or bilingual version is advisable where necessary to ensure that the candidate understands the information and limitations.

What should a voluntary Turkish disclosure document contain?

It should address the franchisor, trademarks, network, costs, fees, suppliers, territory, performance claims, contracts, guarantees and material risks.

What is the best method for avoiding earnings-claim disputes?

All financial information should be written, supported by records, clearly qualified, reviewed for consistency and delivered sufficiently before signing.

This article provides general legal information as of July 2026 and does not constitute legal, accounting, tax, investment or financial advice. Franchise disclosures and earnings claims should be assessed according to the precise statements, supporting data, transaction documents, timing, parties and circumstances of each investment.

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