Franchising in Belgium: plan the statutory cooling-off period correctly

Your existing business is ready to grow through independent operators. A prospective franchisee is enthusiastic and keen to open quickly. This is precisely when you risk asking them to sign a reservation agreement or pay a deposit too soon. A healthy franchise community starts with room for an informed decision. This guide is therefore not about drafting your disclosure document, but about managing the statutory cooling-off period before your first franchise agreement.

1. Build the statutory month into your timetable

Belgium has specific rules governing the pre-contractual stage of commercial cooperation agreements. These are set out in Book X, Title 2 of the Belgian Code of Economic Law (WER). The statutory definition in Article I.11, 2° extends beyond franchising: other arrangements involving the provision of a business format may also fall within its scope.

Under Article X.27 WER, the prospective franchisee must receive both the draft agreement and a separate pre-contractual disclosure document, commonly known in Belgium as the PID, at least one month before the agreement is concluded. These must be supplied in writing or on a durable medium accessible to the prospective franchisee.

Do not use a twenty-day period or automatically treat one month as thirty days. Have the earliest permissible signing date calculated and checked, particularly where shorter months, public holidays or uncertainty over receipt are involved.

Then work backwards from the planned opening date. Schedule separate stages for handing over the documents, independent review, any amendments, signing and implementation. An ambitious opening date does not shorten the statutory period. Explain this sequence to the staff supporting prospective franchisees too: enthusiasm must never turn into pressure to rush.

2. Keep evidence of the document handover

A sent message is not the same as a watertight record. You need to be able to show later which documents the prospective franchisee received and when. Give every version a clear date and version number, for both the draft agreement and the PID.

A practical handover file contains:

• the identity of the intended contracting parties;
• the complete draft agreement, including the annexes it refers to;
• the separate PID;
• a list of all files supplied;
• evidence of delivery and, where possible, acknowledgement of receipt;
• the verified earliest permissible signing date.

For example, use downloadable documents that the prospective franchisee can save unchanged. Simply providing access to a web page that you can subsequently edit does not offer sufficient certainty about the version received.

If you request an acknowledgement of receipt, keep it strictly administrative. It must not quietly include acceptance of the business format, a promise to pay or a reservation. Have the template legally reviewed before using it as standard.

Also check who will actually sign. If the prospective franchisee intends to operate through a company that has yet to be incorporated, discuss with your legal adviser at an early stage how the disclosure process should align with the eventual contracting party.

3. Use the cooling-off period without bringing commitments forward

The cooling-off period is intended for due diligence, not as a waiting period during which the partnership is effectively agreed already. As a rule, no commitments may be entered into, and no fees, other sums or security may be requested or paid before it expires. There is a statutory exception for confidentiality agreements; do not treat this as permission to enter into other preliminary agreements.

Avoid paid territory reservations, deposits towards the initial franchise fee or supposedly non-binding letters of intent that impose a penalty for withdrawing. What matters is the substance, not the heading on the document.

What can you usefully arrange? Explain the documents, answer questions and let the prospective franchisee observe the business without having them work as a franchisee already. Encourage them to consult their own accountant and solicitor. Keep a log of questions and confirm important answers in writing.

Distinguish between investigation and implementation too. A prospective franchisee can explore financing options or compare quotations, but irreversible expenditure can create unwanted pressure. Have lease arrangements, refurbishment contracts and orders reviewed separately before anyone commits. Never use such expenditure to push a prospective franchisee into signing.

4. Check amendments before asking for a signature

Essential terms sometimes change during discussions. Support arrangements may be restructured, for example, or the substance of a financial obligation may change. Do not simply assume that the original signing date still applies.

Under the WER, amendments to the draft agreement may require a fresh document handover and a new waiting period. Statutory exceptions exist, including for amendments requested in writing by the prospective franchisee. Have each amendment assessed to establish what is required, and record who proposed it. Simply adding a new version number is not enough.

Carry out a final check immediately before signing: are the correct parties named, do the final documents match the information supplied, and has the applicable period expired? The general rules of Belgian contract law and other applicable rules also continue to apply. Completing the cooling-off period correctly does not make an unlawful contract term valid.

Practical takeaway: put one person in charge of documents, versions and deadlines. Do not proceed to signing until that person has had the file legally reviewed. This gives your first franchisee genuine room to decide and lays a reliable foundation for your franchise community.