Buying a franchise in Belgium: who will be the contracting party?

Choosing a brand is not the same as deciding who will buy the franchise. Will you become the franchisee personally, or will your company enter into the agreement? That choice affects who pays, issues invoices and can exercise contractual rights. As part of a franchise network, you operate as an independent business owner. Make sure your business has the right legal structure before you commit.

1. Decide who will operate the business

A sole trader business has no separate legal personality: you trade as an individual. A company with legal personality, such as a Belgian private limited company (besloten vennootschap, or BV), can be a party to the franchise agreement in its own right. That distinction must be reflected in the contract, not just in your business plan.

The right choice depends on factors including your investment, any co-founders, the risks involved and your future plans. A company is not automatically the best solution. It comes with incorporation costs, administration and obligations of its own. Equally, you should not choose to operate as a sole trader simply because it seems quicker to get started.

Discuss the following with your accountant and, where necessary, a notary:

• Who will contribute funds, and who will own the business?
• Who will manage day-to-day operations and make decisions on behalf of the business?
• Which legal structure suits the financial and operational risks?
• Do you want to bring in a partner or open more outlets later?

Then ask whether the franchisor accepts your chosen structure. Approval of you as a prospective franchisee does not necessarily mean that every company in which you have a stake will automatically be accepted as the franchisee.

2. Distinguish between the business owner and the signatory

The first page of the contract must state unambiguously who is being granted the franchise rights. For an existing company, check its official name, legal form, registered office and enterprise number against Belgium’s Crossroads Bank for Enterprises register. Also check who is authorised to represent it.

A director’s signature does not in itself make that director the franchisee personally. The wording must make clear that they are acting on behalf of the company. Pay close attention to the distinction between the description of the parties and the signature block.

Practical example: the agreement names you personally as the franchisee, while the financial plan assumes that your BV will operate the business. This is not an administrative detail. The company does not automatically become a contracting party because it later pays the invoices. Have the documents aligned before signing.

Does your company not yet exist? Do not casually sign with the words ‘in formation’ added to its name. Acts performed on behalf of a company in formation are subject to specific rules under the Belgian Code of Companies and Associations. Personal liability may arise. Establish in advance who is acting, how the company will take over the obligations and which statutory conditions apply.

3. Align the contracting party with Belgium’s disclosure rules

Belgium has statutory pre-contractual rules for commercial cooperation agreements, including franchise agreements. These appear in Title 2 of Book X of the Code of Economic Law, Articles X.26 to X.33. The statutory definition is set out in Article I.11, 2°. The label the parties give their relationship does not determine whether the rules apply.

Under Article X.27, the prospective franchisee must receive the draft agreement and the pre-contractual information document (known by its Dutch abbreviation, PID) at least one month before entering into the agreement. These documents must be supplied in writing or on a durable, accessible medium.

Any change to the intended contracting party therefore needs particular attention. Did you receive the documents personally, but a newly incorporated company will ultimately sign? Do not assume, without a proper assessment, that all disclosure obligations towards the eventual contracting party have been met.

Notify the franchisor of the change and seek legal advice on who must receive the documents and what timetable applies. Also record the capacity in which you receive them. Do not try to preserve a planned opening date by changing the buyer’s identity only at the point of signing.

4. Check that the whole arrangement fits the chosen buyer

Before signing, draw up a simple chart of the parties involved. For each agreement—franchise, lease, loan, insurance and key supplier contracts—note who holds the rights and who bears the obligations.

Not every agreement necessarily has to be entered into by the same person or company. However, any differences must be deliberate and legally workable. If your company becomes the franchisee but another business provides the staff or operates the premises, further coordination is needed. Franchise rights are not automatically available to every associated company.

Finally, check whether later changes, such as moving from sole trader status to a company, require the franchisor’s consent. Restructuring for tax or organisational reasons can also have contractual consequences.

Practical conclusion: first decide who will buy the franchise and who will operate the business. Then ensure that the franchise agreement, disclosure process and other agreements reflect that choice. This gives you a clear legal foundation from the outset, rather than a structure that needs fixing later.