Buying a Franchise in Belgium: Check the Marketing Fund

A strong franchise network can build greater visibility together than an individual business owner can alone. But a compulsory marketing contribution does not automatically guarantee more customers for your outlet. If you are buying a franchise in Belgium, look beyond the amount you will pay: find out who decides how the money is spent and what information franchisees receive. These checks can turn a vague expense into a clear contractual commitment you can verify.

1. Map out all marketing payments

Ask the franchisor for a single breakdown of all compulsory marketing expenditure. Contributions to the shared fund may sit alongside other costs: local advertising, launch campaigns, promotional packages, digital services or compulsory participation in promotions. An attractive headline percentage therefore does not tell the whole story.

For each payment, have the following set out in writing:

• The basis of calculation: is it a fixed amount or a percentage, and precisely which turnover is it based on?
• The sales included: do online orders, deliveries through platforms and gift card sales count?
• The adjustments: how are returns, cancellations, discounts and refunds handled?
• The payment schedule: when are invoices issued, and is there an annual reconciliation?
• The tax treatment: are amounts inclusive or exclusive of VAT, and how are they invoiced?

Pay particular attention to turnover recorded through your outlet where another party receives part of the revenue. Ask your accountant to explain how the contractual definition translates into your accounts.

Next, request an anonymised sample invoice and a reconciliation statement from a comparable outlet. Ask the franchisor to identify which amounts are charged on top of the standard franchise fee. This helps prevent you from leaving a campaign out of your budget or counting it twice.

2. Examine what the fund can be used for

The term ‘marketing fund’ alone tells you little about where the money goes. Ask which expenses are permitted and which are expressly excluded. Consider media spending, campaign development, website management, advertising agencies and internal staff costs.

Distinguish between attracting customers to the franchise brand and recruiting new franchisees. Both can help the franchisor, but they do not necessarily provide the same benefit to existing outlets. Ask whether your contribution can also be spent on selling new franchises.

Also assess how relevant the marketing is to the Belgian market. Are campaigns available in your customers’ language? Do they take account of local opening hours, delivery areas and the products or services your outlet offers? An international campaign can be valuable, but local adaptations may incur extra costs.

Ask these questions too:

• Do franchisor-owned outlets contribute on the same basis?
• How is the budget allocated between countries, regions and sales channels?
• Are any agencies used connected to the franchisor?
• Are supplier discounts or rebates returned to the fund?
• What happens to unspent money at the end of the year?

Keeping separate accounting records for the fund improves transparency. However, do not assume that a separate bank account automatically gives the money legal protection in the event of insolvency. Have the specific structure assessed if this matters to your investment.

3. Put information and consultation rights in the contract

Trust within a franchise network works better when access to information does not depend on a non-binding promise. Before signing, ask which reports you will receive, how often and in what detail.

A useful annual report shows contributions received, expenditure by category, any management costs and the remaining balance. Also request a budget for the following year and an explanation of significant variances. A presentation showing only audience reach figures is no substitute for financial reporting.

Discuss how franchisees are involved. A marketing committee may have an advisory role, but that is not the same as having approval rights. Make sure the contract clearly states who makes decisions, how representatives are chosen and what happens if disagreements arise.

Ask existing franchisees whether reports arrive on time and whether their questions are actually answered. Request concrete examples without demanding confidential business information.

Do not base your assessment solely on immediately measurable sales. Brand awareness also develops over the longer term. Nevertheless, agree on appropriate indicators, such as website visits, enquiries or campaign take-up. An explicit guarantee of results is different from an obligation to carry out campaigns with due care.

4. Check the Belgian legal framework

Belgium has no single, comprehensive law specifically governing the performance of franchise agreements. General contract law and the applicable provisions of the Belgian Code of Economic Law remain important, including the rules on unfair terms between businesses.

There are, however, specific rules for the pre-contractual stage: Title 2 of Book X of the Belgian Code of Economic Law governs pre-contractual information for commercial cooperation agreements. For a new franchise, the draft agreement and pre-contractual information document must, in principle, be provided at least one month before the agreement is concluded. Use that period to have the marketing contributions and associated obligations reviewed.

Do not assume you have an automatic statutory right to approve the marketing budget or inspect all supporting invoices. Ensure that any oversight and information rights you want are expressly included in the agreement. Unclear or potentially unbalanced clauses should be reviewed by a Belgian legal adviser.

Practical conclusion: only sign when you can explain what you are paying, what the money is for and how you can check its use. To do that, request at least a breakdown of costs, a sample report and clear contractual provisions on the information you will receive.