Franchising in Belgium: prepare early for contract renewal

When converting an existing Belgian business into a franchise operation, the initial launch is usually the first priority. Yet future contract renewal also deserves attention from the outset. After all, a franchise network is built for long-term collaboration, but continued cooperation should not be taken for granted. A clear renewal procedure lets both partners know when to review the relationship, what information is needed and how to reach an informed decision.

1. Distinguish between reviews and renewal

An annual review is not a contract renewal. A review covers the outlet’s operations and the working relationship. At renewal, two independent businesses decide whether to commit to each other again, and on what terms.

When drafting your first franchise agreement, therefore, set out how that decision-making process will work. Address questions such as:

• Does the agreement expire automatically, or does it provide for some form of continuation?
• Who must initiate renewal discussions?
• What contractual deadlines apply to each party’s response?
• What conditions apply to continuation, and how will they be assessed?
• When will the parties receive written confirmation of the outcome?

Avoid vague principles such as ‘good franchisees can stay’. This provides no useful benchmark. Instead, specify which obligations and performance measures are relevant, without suggesting that every positive review automatically entitles the franchisee to a new contract.

Ask a Belgian lawyer to assess the distinction between automatic extension, renewal and a new agreement. The structure you choose may affect the steps required. Giving a document a different title does not necessarily change its legal substance.

2. Build a shared renewal file

Do not wait until the expiry date to start gathering information. Keep a concise record from the start of the relationship to support a balanced assessment later. The aim is not simply to document the franchisee’s shortcomings: your performance as franchisor matters too.

For example, collect review records, agreed improvement actions, details of support provided and unresolved issues. Give the franchisee an opportunity to correct factual inaccuracies and add their own comments.

At renewal, assess three areas separately:

The outlet: can the business responsibly continue operating? Discuss matters such as the continued availability of the premises, the condition of the fit-out and any necessary investment in replacements.

The working relationship: have commitments on support, training and day-to-day operations been met? Which recurring problems need to be resolved?

The new offer: what changes compared with the existing agreement? Consider fees, services and investment obligations. Provide a comparison highlighting the differences alongside the formal documents.

For example, an outlet may be performing well, but the proposed renewal may require a major refit. Satisfaction with past performance is not enough in that situation. The franchisee must also be able to assess the future investment and operating prospects with their own accountant.

3. Apply Belgium’s disclosure rules again

Belgium has specific rules on pre-contractual disclosure for commercial cooperation agreements. These appear in Book X, Title 2 of the Belgian Code of Economic Law (known by its Dutch abbreviation, WER) and also apply to franchise agreements that fall within their statutory scope.

For an initial agreement, Article X.27 WER requires the prospective franchisee to receive the draft agreement and a separate pre-contractual information document at least one month before the agreement is concluded. Article X.28 sets out the required contents of that document.

At renewal, disclosure must not be treated as a start-up formality that has already been dealt with. For the renewal of a fixed-term agreement or the conclusion of a new agreement between the same parties, Article X.29 WER provides for simplified pre-contractual disclosure. This includes the initial pre-contractual information document (PID), the draft new agreement and the simplified document. These must be supplied at least one month before renewal or conclusion of the new agreement.

Have a legal adviser check in advance exactly which rules apply to your situation and what the simplified document must contain. ‘Simplified’ does not mean that a brief email stating the new fee will suffice. Provide clear, understandable documents on paper or in a durable and accessible electronic format.

4. Work backwards from the decision date

Create an internal timetable that allows more time than the statutory minimum. Allow time, in sequence, for the joint review, preparation of the offer, legal checks, formal disclosure and independent assessment by the franchisee.

Appoint one person to manage the renewal file. They should monitor contractual deadlines, document versions and receipt of documents. Verbal enthusiasm from a relationship manager must not be confused with a firm commitment to renew.

Does the proposal change after the documents have been supplied? Have an adviser assess what additional information, and any fresh waiting period, may be required before anyone signs. Avoid letting an approaching expiry date create pressure to accept incomplete arrangements.

Practical takeaway: when launching your franchise, put a renewal procedure in place straight away, with a timetable, a shared review file and a legal check before each renewal. This makes continuation a considered choice for both partners.