Franchising in Belgium: protect franchisee independence

In your own Belgian business, you probably make almost all the decisions. Once you develop that business into a franchise network, things change. A franchisee is not a branch manager, but an independent business owner with their own enterprise and responsibilities. How do you keep your franchise concept recognisable without taking over day-to-day operations? Start by clearly allocating decision-making powers, before you have the first agreement drafted.

1. Distinguish between franchise standards and business decisions

Not every working practice in your existing business should automatically become a requirement for franchisees. Some choices directly support the recognisability of your franchise concept. Others mainly reflect your personal management style.

Create a decision-making matrix with three categories:

• The franchisor decides: essential features of the franchise concept, such as visual branding and the definition of the services offered.
• The franchisee decides: how to organise their own business, including staff recruitment and the day-to-day allocation of tasks.
• Consultation or prior approval: decisions affecting both the local business and the shared franchise concept, such as a refurbishment that changes how the brand is presented.

For each decision, record why any restriction is necessary. “That’s how I do it” is not a strong justification. “This layout makes our service recognisable and enables us to deliver it” is much more specific.

This matrix is a working document, not a blank cheque: have any restrictions legally reviewed. Not everything that seems commercially convenient can lawfully be imposed by contract. Competition law and rules on unfair terms in business-to-business contracts, among other requirements, still apply within a franchise network.

2. Keep staff management with the right business

One important difference from running your own branch is the role of employer. When a franchisee recruits staff, their business is the employer. The franchisor can offer training on the franchise concept and define the skills required for particular roles, but should avoid acting as those employees’ employer in everyday practice.

Agree that, as a rule, operational feedback should go to the franchisee or their designated manager. That person should then handle task allocation, coaching and staffing decisions.

For example, suppose you notice that an employee is not delivering the agreed service correctly. Discuss the departure from the standard with the franchisee and clarify the franchise requirement. Do not take over staff scheduling yourself or decide on disciplinary action.

Also specify who handles the employer’s administrative obligations. A franchisee hiring employees must register as an employer with Belgium’s National Social Security Office (RSZ/ONSS) and submit the required Dimona employment notifications. Central support can be useful, but does not automatically make the franchisor responsible for these obligations.

If central management regularly gives instructions directly to franchisees’ staff, have the actual working arrangements reviewed from an employment law perspective. An independence clause alone will not resolve unclear practices.

3. Turn decision-making powers into clear contractual terms

A franchise agreement should do more than list what the franchisee must do. It should also make clear where their freedom to decide begins and ends. Avoid sweeping wording such as “all decisions require the franchisor’s consent”. This makes the relationship cumbersome and increases the likelihood of disputes.

Approval procedures should specify at least:

• which decisions must be submitted in advance;
• what information is required;
• the substantive criteria used to assess the request;
• the agreed deadline for a response;
• how the parties will deal with a refusal or a failure to respond.

Belgium has specific pre-contractual rules for commercial cooperation agreements, including franchise agreements. These appear in Book X, Title 2 of the Belgian Code of Economic Law. Under Article X.27, the prospective franchisee must receive both the draft agreement and a separate pre-contractual information document at least one month before entering into the agreement, on a durable and accessible medium.

Make sure, therefore, that the allocation of decision-making powers is already clear in the draft agreement you provide. Do not present the relationship as offering extensive business independence if the draft makes almost every local decision subject to approval. The general rules of Belgian contract law apply alongside these disclosure requirements.

4. Practise handling difficult everyday situations

Test your decision-making matrix against realistic situations from your existing business. A franchisee wants to hire additional staff, choose a different accountant or invest in equipment that customers will not see. Who decides, what information is needed, and why?

Ask someone to play the franchisee and critically question each requirement for central approval. This will reveal where your habit of deciding everything yourself still influences the arrangements. Then check that the contract, internal guidance and everyday communications all observe the same boundaries.

Practical takeaway: protect what makes your franchise concept recognisable, but give franchisees genuine freedom to run their businesses. A clear decision-making matrix, legally reviewed and consistently applied, helps your franchise network work together without turning independent partners into branch managers in all but name.