Buying a franchise in Belgium: test the turnover forecast

An attractive turnover forecast makes a franchise proposal feel tangible, but projected sales are not proven results. Outlets operating under the same franchise brand can perform very differently depending on their location, how long they have been trading and their customer profile. If you are buying a franchise in Belgium, you therefore need to ask not just how much turnover is possible, but above all what supports that expectation. The following approach will help you turn a sales pitch into a business plan you can scrutinise.

1. Separate statutory disclosures from commercial forecasts

Belgium has no standalone law governing the entire franchise agreement. However, specific rules apply to pre-contractual disclosures for commercial cooperation agreements, including franchises. These are set out in Book X, Title 2 of the Belgian Code of Economic Law (known by its Dutch abbreviation, WER). General contract law and the rules on unfair terms between businesses are also relevant, among other provisions.

The franchisor must provide a draft contract and a pre-contractual disclosure document (known in Belgium as the PID) at least one month before the agreement is concluded. The PID contains important contractual provisions and socio-economic information. This includes information about the market, both generally and locally, to help you assess the proposed business relationship.

A PID does not, however, guarantee a particular level of turnover. Distinguish between mandatory disclosures, historical outlet performance and a forecast for your future business. Even a professionally presented spreadsheet depends on assumptions.

For every forecast, ask who prepared it, when it was prepared and what data underpins it. Clarify whether it is an illustration, a network average or a calculation for your specific location. Does the contract state that turnover is not guaranteed? That makes checking the figures beforehand all the more important, but it does not automatically mean that incorrect or misleading information has no legal consequences.

2. Check whether the comparison outlets are genuinely comparable

An average drawn from successful outlets tells you little if your business will open in a different type of location. Ask which outlets have been included in the comparison and why. Anonymised data can be useful, provided the relevant characteristics remain visible.

Check at least the following:

• Trading history: are these new outlets or businesses with a customer base built up over many years?
• Location: are they neighbourhood shops, town-centre premises, roadside outlets or units in shopping centres?
• Capacity: do they differ in floor area, seating, treatment rooms or available appointment slots?
• Sales channels: does turnover also include deliveries, online sales or business customers?
• Measurement period: do the figures cover a full financial year, a few peak months or an annualised figure?

Also ask whether closed or weaker-performing outlets have been excluded from the calculation. Looking only at the successful businesses that remain can give a distorted picture. An average without any indication of the spread also conceals how widely results vary. Where available, ask for the median and the range of results for comparable businesses too.

Establish exactly what turnover means: whether it includes or excludes VAT, whether it is before or after discounts and returns, and which sales channels it covers. Without consistent definitions, you are not comparing like with like. If the franchisor cannot share certain data, record that uncertainty in your assessment rather than filling the gaps with favourable assumptions.

3. Rebuild the forecast around your location

Start with the day-to-day sales process, not the desired annual total. For a shop, for example, you could calculate turnover using visitor numbers, the proportion who make a purchase and the average transaction value. For a service business, available appointment slots, booking rates and revenue per appointment are more logical building blocks.

Test each building block separately. Observe the location on different days and at different times. Distinguish between passers-by and people who genuinely belong to your target market. Investigate accessibility, visibility, nearby competitors and the impact of holiday periods or local roadworks and construction.

Then ask how the franchisor has factored these local conditions into the forecast. National brand awareness does not prove how many customers your particular outlet will attract. Nor does a busy street automatically generate enough purchases.

Check practical capacity as well. Can the business handle the forecast number of transactions with the available space, opening hours and equipment? If the forecast assumes almost full capacity from the first month, there needs to be a clear explanation for the absence of a build-up period.

Prepare a cautious scenario alongside the base case. For example, reduce visitor numbers or booking rates, and assess separately the effect of a lower average transaction value. Choose assumptions based on the evidence for your proposed business, rather than an arbitrary standard percentage.

4. Factor uncertainty into your purchase decision

Ask an independent accountant to review the calculation and its underlying assumptions. Provide not just the final totals, but also the source data, formulas and the franchisor’s explanations. Ask specifically which assumptions have the greatest impact on the result.

Discuss discrepancies with the franchisor in writing. Request a revised calculation if, for example, your opening hours or location differ from those assumed. Confirm which version you are relying on for your purchase decision and retain the original explanations.

Have a lawyer assess how the forecast relates to the PID and the contract. Where pre-contractual information is missing or incorrect, the remedies available depend on the specific failing; disappointing turnover does not in itself invalidate an agreement.

Practical conclusion: do not buy on the strength of one persuasive turnover figure. Proceed only when you can explain which customers are expected to generate that turnover, why the comparison outlets are relevant and which uncertainties you consider acceptable.