Franchise Company Formation in Türkiye: Strategic Guide for 2026

Türkiye has emerged as one of the most attractive franchise markets in its region, offering access to a dynamic domestic market, strategic geographic positioning, and a business-friendly legal framework. For international and domestic brands alike, franchise company formation in Türkiye represents a scalable and legally secure method to expand operations while leveraging local market expertise.

As Finlexia Turkish Accounting Firm, a full-service company formation and governance firm based in Istanbul and serving clients in multiple languages since 2017, we regularly advise franchisors and franchisees on structuring, establishing, and managing franchise businesses in Türkiye.

Our company formation lawyers team provides a detailed overview of the legal, corporate, and operational aspects of franchise company formation in Türkiye for 2026 and beyond.

Table of Contents

The franchise industry in Türkiye has experienced remarkable growth over the past two decades, with the country now ranking among the top franchise markets in the region. The Turkish Commercial Code provides a comprehensive legal framework that protects both franchisors and franchisees, while government incentives encourage foreign investment in the franchise sector.

When considering company formation in Türkiye, franchise businesses benefit from streamlined registration procedures, transparent regulatory requirements, and access to skilled workforce pools across major metropolitan areas including Istanbul, Ankara, and Izmir.

Understanding Franchising Under Turkish Law

Türkiye does not have a standalone Franchise Law. Instead, franchise relationships are governed by a combination of legal frameworks, including:

• Turkish Code of Obligations
• Turkish Commercial Code
• Intellectual Property Law
• Competition Law regulations

Franchise agreements are recognized as sui generis contracts, meaning they are shaped primarily by contractual freedom, provided mandatory legal provisions and public policy are respected.

From a company formation perspective, franchising in Türkiye typically involves establishing a local legal entity that will either act as the master franchisee, area developer, or direct franchise operator.

Choosing the Right Legal Structure for a Franchise Company

One of the most critical steps in franchise company formation in Türkiye is selecting the appropriate corporate structure. The most commonly used company types for franchise businesses are:

Limited Liability Company (Ltd. Şti.)

The limited liability company is the most popular choice for franchise operations due to its flexibility, lower capital requirements, and simplified governance. It is particularly suitable for single-unit or multi-unit franchisees. Detailed guidance on this structure is available through our limited liability company formation services.

Joint Stock Company (A.Ş.)

Joint stock companies are generally preferred for large-scale franchise networks, master franchise arrangements, or businesses planning future investment rounds or public offerings. While governance requirements are more complex, this structure offers enhanced credibility and scalability.

Our team advises clients comprehensively on joint-stock company formation in Türkiye, ensuring the selected structure aligns with commercial objectives, regulatory requirements, and long-term growth plans.

Franchise Agreement Considerations Before Company Formation

Before proceeding with company incorporation, it is essential to finalize the franchise agreement. Key elements typically include:

• Scope of franchise rights and territory
• Trademark and intellectual property licensing
• Initial franchise fees and ongoing royalties
• Training, operational standards, and reporting
• Termination, renewal, and post-termination obligations

Although Turkish law does not mandate pre-contractual disclosure similar to some jurisdictions, transparency and compliance with competition rules are crucial. Improper drafting may expose the franchise system to enforceability risks or administrative penalties.

Our Turkish company formation lawyers frequently collaborate with franchisors to ensure that franchise agreements are compatible with Turkish legal practice and competition law principles.

The Central Role of the Franchise Agreement

The Franchise Agreement is the cornerstone of the entire operation. Our lawyers ensure this document is meticulously drafted to:

• Clearly Define IP Rights: Secure the licensed use of the franchisor’s trade name, trademark, know-how, and proprietary systems. Protecting these Intellectual Property (IP) rights with the Turkish Patent and Trademark Office is paramount.
• Specify Obligations: Detail the obligations of both the franchisor (providing training, support, and know-how) and the franchisee (upholding quality standards, paying fees, and using the system correctly).
• Compliance with Competition Law: Ensure non-compete clauses and territorial exclusivity agreements adhere to the Law on the Protection of Competition (Law No. 4054) to benefit from block exemptions where market share does not exceed the stipulated limits.
• Termination and Renewal: Establish clear and enforceable provisions for termination, breach remedies, and renewal options, in line with Turkish judicial precedents, which often favor the franchisee in disputes concerning termination and non-renewal.

Mandatory Pre-Contractual Disclosure

A critical legal requirement is the concept of pre-contractual disclosure. Although not codified in a separate franchise act, Turkish courts, relying on the principle of good faith under the TCO, require franchisors to provide prospective franchisees with comprehensive, timely, and accurate information about the franchise system before the contract is signed.

This information should include, but is not limited to, the franchisor’s history, financial background, fee structure, obligations, and the rights being granted. Failure to provide adequate disclosure can lead to significant legal repercussions, including the voiding of the agreement or damages awarded to the franchisee.

Required Documents for Franchise Company Formation

Franchise company incorporation in Türkiye requires the preparation and submission of various corporate documents. While requirements may vary depending on shareholder structure and nationality, standard documentation includes:

• Articles of Association
• Shareholder and director identification documents
• Notarized and apostilled powers of attorney (if applicable)
• Registered address documentation

A detailed checklist is available through our guide on required documents for company formation, which we tailor specifically for franchise business models and foreign shareholders.

Taxation of Franchise Companies in Türkiye

Tax planning is a fundamental component of franchise company formation. Franchise entities in Türkiye are subject to several tax obligations, including:

• Corporate income tax
• Value-added tax (VAT) on franchise fees and royalties
• Withholding tax on royalty payments to foreign franchisors

Transfer pricing, double taxation treaties, and permanent establishment considerations are particularly relevant for cross-border franchise structures. Our comprehensive taxation Guide helps franchisors and franchisees navigate these obligations efficiently while maintaining compliance with Turkish tax legislation.

Opening a Corporate Bank Account

Following incorporation, franchise companies must open a corporate bank account in Türkiye. This step is essential for:

• Capital deposit requirements
• Payment of franchise fees and royalties
• Operational cash flow management

Bank compliance procedures can be challenging, especially for foreign-owned companies, due to enhanced KYC and AML requirements. Finlexia CPA provides end-to-end assistance with bank account opening, coordinating directly with Turkish banks to streamline the process.

Accounting, Bookkeeping, and Ongoing Compliance

Once operational, franchise companies must comply with Turkish accounting and financial reporting standards. Mandatory obligations include:

• Monthly VAT returns
• Quarterly provisional tax filings
• Annual corporate tax returns
• Statutory bookkeeping under Turkish Commercial Code

Professional accounting & bookkeeping support is critical for franchise businesses, particularly those dealing with royalty payments, intercompany transactions, and multiple franchise units.

Timeline for Franchise Company Formation in Türkiye

Understanding the expected timeline helps franchisors plan market entry effectively. In general:

• Company incorporation: 3–7 business days
• Tax and social security registration: 1–3 business days
• Bank account opening: 1–3 weeks (depending on shareholder structure)

A detailed breakdown of each phase is available in our timeline guide, which we adapt for franchise-specific requirements and regulatory approvals.

Strategic Advantages of Franchising in Türkiye

Franchise company formation in Türkiye offers several strategic benefits:

• Large and youthful consumer market
• Strong retail, food, hospitality, and service sectors
• Customs Union with the EU
• Competitive labor and operational costs

These factors make Türkiye an ideal hub for regional franchise expansion across Europe, the Middle East, and Central Asia.

Contact us for Franchise Company Formation in Türkiye

With over 9+ years of experience, Finlexia Turkish Accounting Firm provides integrated legal, corporate, and governance services for franchise businesses entering or expanding in Türkiye. Our multidisciplinary team supports clients from initial structuring to long-term compliance, ensuring legal certainty and operational efficiency at every stage.

If you are considering franchise company formation in Türkiye or expanding your franchise network in 2026, we invite you to contact Finlexia Turkish Accounting Firm. Our Istanbul-based team will be pleased to provide tailored legal and strategic advice to support your successful market entry.