Franchise or licence in Belgium: which rules apply?

You want to grow your existing business through independent partners, but are unsure whether to use a franchise agreement or a licence. That choice does not start with the heading on the contract. In Belgium, the substance of your arrangement determines which disclosure requirements apply. Anyone looking to build a franchise network should therefore first map out exactly which rights and services each partner will receive.

1. Look at the arrangement, not the label

Calling an agreement a ‘trade mark licence’, ‘partnership agreement’ or ‘light-touch franchise’ does not take it outside the Belgian rules. The statutory definition of a commercial cooperation agreement is broader than franchising alone.

Article I.11, 2° of the Belgian Code of Economic Law (known by its Dutch abbreviation, WER) defines the commercial cooperation concerned. Article X.26 sets out the scope of the pre-contractual rules. The key element is granting the right to use a commercial format when selling products or providing services.

That format may be made available through, among other things:

• a shared brand name;
• a shared trading name;
• the transfer of know-how;
• commercial or technical assistance.

These elements do not all have to be present at once. If even one forms part of an arrangement that also meets the other statutory conditions, the rules may apply. Providing only limited services or having no comprehensive operating manual does not, in itself, rule out their application.

Practical first step: describe in plain language what the partner is actually allowed to do and what you actually provide. Then have the legal classification checked before choosing a standard contract.

2. Map out the rights within your business format

Start with your existing business operations. Which elements will remain exclusively yours, and which may another business owner use? Create a single overview with three columns: the right granted, how it works in practice and the corresponding obligation.

For brand use, for example, record whether the partner may put your name on their premises, website and quotations. For know-how, describe the working methods you will pass on. For assistance, specify the commercial or technical support actually offered. Also record anything expressly excluded.

Then work through these questions:

• Will the partner simply sell your products, or also operate a recognisable business format?
• Will the partner trade under their own name, yours or both?
• Will the partner gain access to established processes or proprietary methods?
• Are you promising guidance, joint campaigns or technical support?
• What obligations and payments will the partner undertake in return?

Suppose you run a successful maintenance business. You allow an independent partner to use your name, provide work instructions and offer commercial support. Calling this a ‘licence’ is not enough to conclude that the Belgian pre-contractual rules do not apply.

Conversely, you should not assume, without further assessment, that every standalone sales or licence agreement automatically falls within these rules. The specific terms and the full statutory definition remain decisive.

3. Link the legal classification to the right obligations

Belgium has specific pre-contractual rules for commercial cooperation agreements in Articles X.26 to X.33 of the Code of Economic Law. This is not a wholly separate body of franchise contract law, but neither is it an unregulated area. General contract law and other applicable economic legislation also remain relevant.

If your arrangement falls within this framework, the prospective partner must receive both the draft agreement and a separate pre-contractual disclosure document at least one month before entering into the agreement. This document, known in Dutch as the PID, contains important contractual provisions and socio-economic information. The documents must be drafted in clear, understandable language and provided in writing or on an accessible, durable medium.

During the statutory period, as a general rule, no commitments may be entered into and no fees, sums or security may be requested or paid. Statutory exceptions exist, including for confidentiality arrangements. Have their application checked by a legal adviser rather than devising your own supposedly ‘non-binding’ reservation arrangement.

An incorrect classification can have serious consequences. If the required documents are missing or the statutory period is not observed, the party receiving the rights may, subject to the statutory conditions, seek to have the agreement declared void within two years of its conclusion.

4. Make sure your offer and your contract tell the same story

Do not have only the contract reviewed. Give your legal adviser your presentation for prospective partners, sample emails, service overview and rights map too. A bare-bones licence agreement does not match a sales pitch promising a fully supported business format.

Ask for a reasoned assessment of the applicable legal framework and record which facts are decisive. If you later change the substance of your offer, have that assessment reviewed. Additional assistance or broader use of your commercial identity may be relevant.

Practical conclusion: first decide what you want to share with partners, then check the legal classification, and only then name the agreement. This gives your franchise network a clear foundation, without the false reassurance of a different contractual label.