Franchising in Belgium: get your pricing policy right

In your own business, you set the selling prices yourself. Once you expand through franchising, you build a network of independent business owners. A consistent brand identity does not mean you can simply impose the same prices everywhere. Before entering into your first franchise agreement, develop a pricing policy that works commercially while respecting your franchisees’ freedom to set their own prices.

1. Separate brand standards from pricing decisions

As a franchisor, you want customers to recognise your franchise concept. You can agree standards for presentation, service and quality. Prices charged to end customers require a different approach: in principle, an independent franchisee must be free to set their own resale prices.

Belgian and EU competition law are important here. Book IV of the Belgian Code of Economic Law (known by its Dutch abbreviation, WER) prohibits anti-competitive agreements. Article 101 of the Treaty on the Functioning of the European Union may also apply where trade between Member States is affected.

The EU Vertical Block Exemption Regulation, Regulation (EU) 2022/720, allows certain agreements between businesses at different levels of a distribution chain, subject to conditions. Under that regulation, imposing fixed or minimum resale prices is a hardcore restriction. Do not assume that operating under a single brand creates an exception.

Before expanding, draw up a decision checklist:

• Which elements of your offering need to remain recognisable?
• Which selling prices are recommendations only?
• Who decides on local discounts?
• How can franchisees adjust their prices in the systems they use?

This helps prevent practices from your own outlet inadvertently becoming mandatory rules for independent partners.

2. Make recommended prices genuinely optional

A recommended selling price can help franchisees position a new product. You can explain the assumptions behind it, such as purchasing costs, preparation time or customer expectations. Present this information as guidance, not as a required outcome.

Calling a price ‘recommended’ is not enough if you then penalise franchisees for departing from it. Examples include withholding commercial support, reducing supplies or threatening termination because a franchisee sells at a lower price. Benefits conditional on following a particular price can also undermine freedom of choice.

Maximum selling prices may be permitted under certain conditions. However, pressure or incentives must not turn them into fixed or minimum prices in practice. The arrangement as a whole must also be assessed against the applicable competition rules.

A useful internal practice is to state clearly on every price list what its status is. Make sure staff who support franchisees communicate the same message. A carefully drafted contract offers little protection if your commercial manager then announces ‘mandatory recommended prices’ over the phone.

Do not use pricing data to encourage franchisees to align their prices with one another either. Seek advice on which data you need centrally and which information you can share within the network without encouraging anti-competitive coordination.

3. Test promotions and till systems for freedom of choice

Problems often arise not in the contract, but in day-to-day operations. A till system that accepts only centrally set prices can make independent pricing impossible in practice. The same applies to an ordering website where local business owners have no control over the prices of their own offering.

Use a test account to check whether a franchisee can change a price independently. Also check that changes remain in place after a software update. Specify who is responsible for correcting errors and how quickly they must do so.

Use a short checklist for joint campaigns:

• Is participation voluntary, and how is consent recorded?
• Is the advertised price a recommended price, a maximum price or something else?
• Who funds the discount and any additional costs?
• Does the advertising clearly state where the promotion applies?
• Can an outlet that is not participating avoid confusing customers?

A temporary campaign is not automatically exempt from competition rules. Certain coordinated promotions may require a specific legal assessment. Have that assessment carried out before publishing any price promises.

Also check the consumer protection rules on price displays and advertised price reductions. A promotion that has been properly agreed internally can still be presented misleadingly to customers.

4. Put the policy in place before signing

Belgium has no single, comprehensive law governing franchise agreements. Alongside general contract law, however, specific pre-contractual disclosure requirements apply to commercial cooperation agreements, including many franchise agreements.

Title 2 of Book X of the Code of Economic Law requires the franchisor to provide the draft agreement and the pre-contractual information document at least one month before the agreement is concluded. Pricing arrangements and campaign obligations should be set out consistently and clearly in the relevant contractual and pre-contractual documents. Ask a specialist lawyer to establish which information is required and where it must appear.

Then ensure that the agreement, commercial guidelines and software are aligned. As part of this process, have them checked against Belgium’s rules on unfair terms in business-to-business contracts. A broad clause allowing you to impose unlimited new obligations later deserves particular scrutiny.

Practical takeaway: before launching your first franchise, test one recommended price list, one joint promotion and one local price change. Only when your legal arrangements match day-to-day practice will you have a pricing policy that allows your network to grow responsibly.