NDA for a franchise enquiry

A prospective franchisee is shown the franchise system before signing: the operations manual, the financial projections, existing franchisees' performance and the franchisor's suppliers and pricing, which together are what the franchise fee buys. A non-disclosure agreement signed at the enquiry stage protects that information from an enquirer who decides to set up alone, and it also has to deal with the prospective franchisee's own business and the statements the franchisor makes during the sale. I review the NDA a franchisor has produced, or draft one for the franchisor or for the enquirer, for a fixed fee of £495 in three working days.

Who this is for

Franchisors in England and Wales at the stage of sharing their system with enquirers, and prospective franchisees asked to sign a franchisor's NDA before receiving the prospectus, the projections or the manual. Both parties contract as businesses; there is no franchise statute in the United Kingdom and the NDA is a contract on its own terms.

What matters in an NDA for a franchise enquiry

The system, the manual and what makes the franchise

The NDA should define the franchisor's confidential information to include the operations manual, the systems and processes, the supplier list and prices, the marketing methods, the training materials and the know-how, and should say that the enquirer may use them only to decide whether to take the franchise. Copyright in the manual and the materials belongs to the franchisor under section 11 of the Copyright, Designs and Patents Act 1988, and the franchisor's marks may be used only under a licence in writing signed by the proprietor under section 28 of the Trade Marks Act 1994, which the NDA does not grant.

Projections, existing franchisees' figures and the statements around them

Franchisors share projections and the performance of existing franchisees, and the NDA should protect those figures, which are the franchisees' confidential information as much as the franchisor's. It should also record that projections are illustrative, that the enquirer will make its own enquiries, and that no representation is made except as set out in the franchise agreement; that framing does not exclude liability for a statement that induced the enquirer to sign under section 2 of the Misrepresentation Act 1967, and a clause excluding it is subject to the reasonableness test in section 3, so the review drafts the projections' status with the franchise agreement's disclosure in mind.

Non-compete during the enquiry, and the enquirer who sets up alone

The franchisor's concern is the enquirer who learns the system and opens a similar business without the franchise. The NDA should prohibit use of the information for that purpose and, for a defined period after the enquiry ends, prohibit the enquirer operating a competing business using the franchisor's methods within a territory. A restraint of that kind is enforceable only if it protects a legitimate interest and goes no further than reasonable, and the review drafts it narrowly, since a wide restriction on an enquirer who has signed nothing else is open to challenge and, between businesses, engages section 2 of the Competition Act 1998.

The enquirer's own business and the information that flows back

An enquirer discloses its own finances, its premises, its plans and, where it already trades, its customers, and a franchisor's one-way NDA protects none of it. The review drafts the NDA as mutual where the enquirer is an existing business, with the franchisor bound not to use the enquirer's information to recruit a different franchisee for the same territory or to approach the enquirer's customers.

The British Franchise Association code and the franchisor's disclosure

Members of the British Franchise Association undertake to give prospective franchisees the information they need to make an informed decision, under the Association's code of ethics, and the NDA should be consistent with that disclosure rather than restrict the enquirer from taking advice on it. The review checks that the NDA permits disclosure to the enquirer's professional advisers, its bank and its family where they are involved in the decision, bound to confidentiality, and that it does not prevent the enquirer speaking to existing franchisees the franchisor has named.

If the enquirer does not proceed, duration and remedies

The NDA should require the enquirer to return or destroy the prospectus, the manual extracts and the projections if it does not proceed, and should continue for a stated period, with the system protected for as long as it remains confidential under the standard in the Trade Secrets (Enforcement, etc.) Regulations 2018. It should acknowledge that damages may be an inadequate remedy so that an injunction can be sought against a competing business opened with the franchisor's system, and personal data in the disclosure, such as existing franchisees' details, should be handled under the UK GDPR and the Data Protection Act 2018.

What it costs

NDA review or drafting, £495. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

Can an NDA stop an enquirer opening a competing business with what we showed them?

It can prohibit use of your information for that purpose and, within limits, restrict the enquirer from operating a competing business using your methods for a period, with an injunction available for breach. The restriction has to be proportionate to be enforced, and the review drafts it accordingly.

I am considering a franchise and have been sent an NDA. What should I check?

That it lets you take advice and speak to your bank and existing franchisees, that the non-compete after the enquiry is not wider than the franchisor needs, that your own information is protected, and that the projections' status does not remove your remedies if they were misleading. The review marks it up on those points.

Should the NDA cover the operations manual, or should we hold the manual back?

Hold the manual back until the franchise agreement is signed and disclose only what the enquirer needs to decide, with the NDA covering what is shown. The review advises on the staging and drafts the NDA for the stage the enquirer has reached.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a franchise agreement before you sign
• NDA before selling your business

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.