Buying a Franchise in Belgium: Check the Dispute Resolution Provisions

When buying a franchise, you would rather think about opening day than a dispute. Yet the dispute resolution provisions determine how easily you can enforce your rights in practice. A distant court, expensive arbitration or an unclear complaints procedure can make a resolution harder to reach. In a healthy franchise network, clear arrangements for handling disagreements support a lasting working relationship. Before signing, therefore, check not only what you are being promised, but also how you can enforce those commitments.

1. Map out the full dispute resolution process

Look through the draft agreement for provisions on complaints, formal notices of default, mediation, arbitration, courts with jurisdiction and governing law. Read them together: a single clause rarely gives the full picture. Also check the appendices and any documents referred to in the agreement.

Then draw up a simple step-by-step plan. Who do you report a problem to? How must you do so? How long does the other party have to respond? When can you take further action? Mandatory discussions can be useful, but without a deadline they may actually delay a resolution.

Ask the franchisor to apply the procedure to a specific example: an essential service becomes unavailable and your outlet is affected every day. You need to know who has the authority to commit to a solution, not just which general email address to use.

Pay particular attention to these points:

• Do the same procedural obligations apply to both parties?
• Are notification addresses and contact details clear, and can they be kept up to date?
• Are the deadlines realistically manageable for an independent business owner?
• Can you still seek urgent legal protection while discussions are ongoing?

Have unclear answers clarified in writing and, where necessary, incorporated into the agreement.

2. Distinguish governing law from court jurisdiction

A choice-of-law clause specifies which law the parties want to apply to their agreement. A jurisdiction clause specifies which court should hear disputes. These are different matters. A reference to Belgian law therefore does not automatically mean that you can bring proceedings in a court near your outlet.

Belgium does not have a single, comprehensive law specifically governing franchise agreements. General contract law plays an important role, alongside competition law and Book VI of the Belgian Code of Economic Law, which includes rules on unfair terms between businesses.

In addition, Title 2 of Book X of the Code of Economic Law, Articles X.26 to X.33, sets out specific rules on pre-contractual information for commercial cooperation agreements. For agreements covered by these rules, the draft agreement and pre-contractual disclosure document must generally be provided at least one month before the agreement is concluded. Use that time to have the dispute resolution provisions reviewed as well.

If you are considering an overseas franchise brand, a clause choosing foreign law or foreign courts deserves particular attention. Do not assume that such a clause removes all Belgian legal protections, but equally, do not assume it has no effect. The application of mandatory rules and international jurisdiction rules needs to be assessed in light of your specific circumstances.

Ask your lawyer not only whether the clause is valid, but also what bringing proceedings would mean in practice: travel, translations, local legal representation and enforcement of a judgment.

3. Assess mediation and arbitration separately

Mediation and arbitration are not the same. In mediation, a neutral third party helps the parties reach their own agreement. In arbitration, the parties submit their dispute to one or more arbitrators who decide the outcome.

Mediation can be valuable when you want to continue the working relationship. However, make sure the agreement specifies how the mediator is chosen, who pays the costs and when either party may move on to the next stage. Without legal advice, do not assume that negotiations suspend all statutory or contractual time limits.

An arbitration clause requires a separate review of costs. Ask which rules apply, where the arbitration will take place, which language will be used and how many arbitrators will be appointed. Enquire about administration charges, arbitrators’ fees and any advance payments required. These may be payable in addition to your own legal fees.

Arbitration is not necessarily disadvantageous, but neither is it automatically faster or cheaper. Have an adviser assess whether the procedure is proportionate to the value of disputes your outlet could realistically face. Also ask what options are available to challenge an arbitral award; these differ from an ordinary appeal.

4. Make your rights enforceable in practice

Dispute resolution provisions are only useful if you can support your case with evidence. Keep versions of the agreement, appendices, written commitments, notifications and responses somewhere secure and accessible for the long term. Confirm important telephone conversations by email, keeping the tone professional and avoiding unnecessary accusations.

Before signing, also have any time limits after which rights lapse, provisions on evidence and cost clauses checked. Belgian rules on unfair terms between businesses may be relevant where clauses create a manifest legal imbalance. However, this does not automatically make an unfavourable provision invalid; its wording and context also matter.

Practical conclusion: only sign once you can explain where you can take a dispute, which steps are mandatory and what costs you can expect. An accessible dispute resolution process protects not only your investment, but also the working relationships within the franchise network.