Buying a franchise in Belgium: protect your pricing freedom

An established brand and shared promotions can make a franchise attractive. But who decides how much your customer pays? As an independent business owner, you generally bear the risk of running your outlet. Before buying, you therefore need to understand how much freedom you have to set selling prices and discounts. This should be clear throughout the franchise network, both in the agreement and at the till.

1. Know the difference between recommendations and requirements

Under competition law, a franchisor cannot simply impose fixed or minimum resale prices on independent franchisees. In Belgium, the relevant provisions include Book IV of the Code of Economic Law (known by its Dutch abbreviation, WER) and, where trade between EU Member States may be affected, Article 101 of the Treaty on the Functioning of the European Union.

The European framework for vertical agreements includes Regulation (EU) 2022/720. It treats imposed fixed or minimum resale prices as a hardcore restriction of competition. An agreement containing such a restriction generally loses the benefit of the block exemption. This does not mean that every franchise agreement containing one is automatically void in its entirety: the legal assessment requires more nuance.

Recommended prices and maximum prices are generally permitted, provided that pressure or financial incentives do not effectively turn them into fixed or minimum prices. The other requirements of competition law also continue to apply.

Do not focus solely on the label ‘recommended price’. A price is hardly optional if departing from it results in a warning, the loss of benefits or supply problems. A limit on the discount you can offer may also effectively establish a minimum price.

2. Investigate how prices are actually set

Alongside the draft agreement, ask for the operating manual, the rules for promotions and a demonstration of the till software. An agreement may promise pricing freedom while day-to-day operations restrict it.

Specifically, check:

• Can you change prices uploaded centrally?
• Does this apply to all products and services you sell yourself?
• Can you offer discounts independently, without prior approval?
• Is the franchisor notified when you depart from central prices, and what happens to those notifications?
• Are bonuses, support or other benefits linked to following recommended prices?
• Who sets the price for orders placed through the shared website or app?

For online sales, first establish who is legally the seller to the customer. An order that you sell and fulfil yourself may require a different assessment from a sale made by the franchisor for which you merely provide a fulfilment service. Do not leave these roles implicit in technical documents.

Keep written answers and ask for a demonstration that includes changing a price. Simply being told that ‘everyone just uses the central prices’ is not enough to establish how much control you actually have.

3. Understand the financial impact of shared promotions

A nationwide discount campaign may attract more customers, but it can also reduce your revenue per sale. Investigate not only whether you can opt out of the promotional pricing, but also who bears the financial consequences.

For each type of promotion, ask about participation requirements, duration, how the discount is funded and any reimbursement from the franchisor. Also check how vouchers, loyalty benefits and refunds are processed. A general promise of ‘higher sales volumes’ is no substitute for a calculation.

With your accountant, prepare a simple comparison between a normal sale and a promotional sale. Deduct directly attributable costs from the selling price excluding VAT. These might include the cost of goods, transaction fees and any packaging or delivery costs. This shows you how much remains to cover fixed overheads.

Not every coordinated promotion is automatically prohibited. Certain short-term campaigns may involve specific competition law considerations. Have mandatory promotional prices assessed separately; do not treat a reference to a shared campaign as a blanket exemption from the prohibition on resale price maintenance.

4. Put the arrangements in writing before signing

Belgium does not have a single, comprehensive franchise law setting out all contractual rights. However, commercial cooperation agreements that fall within the statutory definition are subject to the specific pre-contractual rules in Book X, Title 2 of the Code of Economic Law, Articles X.26 to X.33.

As a rule, a prospective franchisee must receive the draft agreement and the pre-contractual disclosure document at least one month before entering into the agreement. Use this period to have the pricing arrangements and their practical implementation reviewed as well. General contract law and the rules on unfair terms between businesses in Book VI of the Code of Economic Law are also relevant.

Where necessary, ask for written clarification that recommended prices are non-binding, how you can change prices in the system and which conditions apply to promotions. Have your legal adviser check that the agreement, operating manual and online sales terms do not contradict one another. A reassuring email does not automatically resolve a conflicting contractual clause.

Practical takeaway: only sign once you can establish who sets your selling prices, how you can change them yourself and what shared discounts will cost you. Pricing freedom must exist not just on paper, but at your till too.