Franchise Agreement in Portugal: Template, Key Clauses and Local Law (2026)

What a Portuguese franchise agreement is A franchise agreement lets a franchisee run a business under the franchisor's brand, system and know-how, in return for fees, while following the franchisor's standards. Franchising is common in Portugal in retail, food and services, but it sits in a different legal position from agency because there is no statute written specifically for it. ## The law that governs it Portugal has no dedicated franchise law. A franchise is treated as an atypical (innominate) contract governed by the general rules of the Portuguese Civil Code (Codigo Civil) and the principle of freedom of contract, together with good faith duties in negotiation and performance. Two further points matter. First, Portuguese courts may apply parts of the agency regime (Decree-Law No. 178/86) to franchise and distribution relationships by analogy, depending on the facts, including the idea of a client indemnity at the end of the relationship. This is judge-made and fact-driven, not automatic. Second, EU and national competition law applies, in particular the Vertical Block Exemption Regulation (EU) 2022/720, which shapes what restrictions on pricing, territory and customers are allowed. ## Key clauses to include ### Grant and territory

Define the franchise, the territory and whether it is exclusive. ### Term and renewal Set the term, renewal conditions and what happens at the end. ### Brand and intellectual property licence Licence the trademarks, trade name and system, and control their use and quality. ### Know-how and operations manual Transfer the know-how and bind the franchisee to the operations manual and brand standards. ### Fees Set the initial franchise fee, ongoing royalties and any marketing fund contribution. ### Pre-contract disclosure Although not mandated by a specific statute, good faith supports giving the franchisee clear, accurate information before signing, to avoid later claims. ### Training and support Describe initial and ongoing training and support. ### Supply and sourcing Set sourcing rules, keeping them within competition law limits. ### Restrictions and competition compliance Draft non-compete, territory and pricing terms to fit the Vertical Block Exemption; resale price maintenance is a hard restriction to avoid. ### Termination and post-term obligations Cover grounds for termination, return of materials, de-branding and any debated end-of-contract indemnity by analogy to agency. ### Confidentiality and governing law Protect know-how and choose Portuguese law and forum. ## Common mistakes - Assuming a franchise statute exists; it does not, so the contract and the Civil Code carry the weight.

• Setting resale prices for the franchisee, which breaches competition law.
• Ignoring that courts may read in an agency-style client indemnity at termination.
• Thin pre-contract disclosure, which invites good faith claims. ## Draft and manage it in one workspace A franchise network means many similar contracts, each with renewal dates, brand standards and fee terms to track. Adira is an AI legal workspace where you can draft from a structured template, see each clause flagged favourable or unfavourable to your side, edit clauses in plain language across a set of agreements and keep renewal and compliance dates in one place. Depth for non-India jurisdictions such as Portugal is on the roadmap, so confirm local coverage first. You can see the approach at Adira. This article is general information, not legal advice. Confirm the current law and competition rules with a qualified Portuguese lawyer before you sign.