In Colombia, can I cancel a franchise after signing if the franchisor hid key costs?

Good day Sir,

My name is Camilo Andrés Riveros Pineda, and I am one of the co-founders of Rimay Business Solutions, a firm specializing in providing comprehensive advice to companies and investors.

As a Colombian business firm with over 10 years of experience advising on commercial contracts and franchise arrangements in Bogota and across the country, I will address your query based on applicable Colombian law. Please note that this is general guidance and not personalized legal advice—franchise disputes can be fact-specific, so I recommend consulting us to review your documents and circumstances.

Yes, you may be able to terminate (or more precisely, seek judicial nullity or rescission of) the franchise agreement if the franchisor hid key costs like mandatory supplier prices or marketing charges, provided this constitutes misrepresentation or fraud under Colombian law. Here's why:

Grounds for termination or nullity: Misrepresentation falls under vicios del consentimiento (vices of consent) in the Civil Code (Arts. 1508-1517). Specifically:

Dolo (Fraud): This occurs when one party intentionally deceives or omits material facts to induce the other to sign (Art. 1511). Hiding mandatory costs that significantly affect profitability or operations could qualify as dolo omisivo (fraud by omission) if it was deliberate and you wouldn't have signed had you known. The deceit must be grave (serious) and determinant (you relied on it to enter the contract; Art. 1515).

Error (Mistake): If the hidden costs led to a fundamental misunderstanding of the deal's economic viability, this could also void consent (Art. 1508), though it's harder to prove without intent on the franchisor's part.

If proven, the contract is anulable (relatively null), meaning a judge can declare it void from the start (Art. 1741, Civil Code). This isn't automatic; you must file a lawsuit. Alternatively, for breach of good faith or unfair terms, you could seek resolucif3n (rescission for non-performance) under Art. 1546 of the Civil Code or Art. 870 of the Commercial Code if the agreement qualifies as commercial.