Franchising in Belgium: set clear rules for changes to your business format

In your own business, you can make quick decisions about new software, a different layout or changes to your services. Once you expand into a franchise network, those decisions also affect independent business owners’ investments and day-to-day operations. Before entering into your first franchise agreement, set out how your business format may change. A sound change procedure protects both the consistency of your concept and franchisees’ ability to plan ahead.

1. Distinguish between routine updates and major changes

Not every adjustment needs the same procedure. A corrected working instruction is not the same as a compulsory new point-of-sale system. Classify future changes by their impact, rather than simply by their subject matter.

A useful classification is:

• Day-to-day improvements: clarifications and minor adjustments that do not involve significant extra costs or disruption.
• Operational changes: new tools, working processes or training that require preparation.
• Major changes to the business format: adjustments involving substantial investment, refurbishment or a fundamentally different service offering.

For each category, describe who makes the decision, what information must be shared in advance and how much preparation is needed. Avoid a classification that allows you, as the franchisor, to label any change as ‘minor’ without justification.

Make this concrete with examples from your existing business. What changes have you introduced recently? What did they actually cost, including training, downtime and writing off old equipment? Use those experiences to determine which decisions will require consultation or separate agreement in future.

2. Set clear limits on your power to make changes

A franchise business format must be able to evolve. However, a clause giving the franchisor unlimited power to change everything is not a sound basis for working together. Define the purpose and scope of your authority: for example, improving quality, complying with legislation or updating technology.

Also specify which matters cannot be changed through an ordinary operational instruction. These might include contractually agreed fees, exclusive rights or essential obligations. Referring to an operations manual does not automatically make a fundamental contract amendment valid.

Belgium has no separate statutory framework governing the franchise agreement as a whole. General contract law and, among other provisions, the rules on unfair terms between businesses are nevertheless relevant. Under Book VI of the Belgian Code of Economic Law, clauses allowing unilateral changes without a valid reason can be legally problematic. Have your clauses reviewed for balance, clarity and enforceability.

Specific pre-contractual rules for commercial cooperation agreements also apply under Book X, Title 2 of the Belgian Code of Economic Law. For an initial agreement, the draft contract and pre-contractual disclosure document must be provided at least one month before the agreement is concluded. Make sure these documents accurately reflect your proposed power to make changes.

Later contract amendments can also trigger pre-contractual obligations. For certain amendments to agreements that have been in force for at least two years, Book X provides a simplified disclosure procedure. Before making an amendment, have an adviser assess exactly which documents and time limits apply. Do not assume that a signed supplementary agreement will always be sufficient on its own.

3. Organise consultation and make costs transparent

Consultation need not give franchisees a general right of veto. It should, however, take place early enough to draw on their practical experience. Anyone informed only after an order has been placed has little opportunity to suggest useful alternatives.

For larger changes, prepare a brief change proposal covering:

• the problem and intended outcome;
• the alternatives considered, including making no change;
• one-off and recurring costs;
• the impact on staff, customers and business continuity;
• the proposed allocation of costs and implementation timetable;
• how feedback will be assessed.

Where possible, test the change in your own outlet first. Measure not only whether the solution works technically, but also how much extra work it creates. Present anticipated benefits as expectations, not as guaranteed increases in turnover.

Also take account of differences between outlets. A business owner who has recently bought equipment is in a different position from someone whose equipment is almost fully depreciated. Consider a phased rollout, a temporary exemption or a different allocation of costs. Set objective criteria so that tailored arrangements within your franchise network remain easy to explain.

4. Implement changes in a controlled way and review them

Once a decision has been made, draw up a single implementation plan with a named person responsible, milestones and clear conditions for going live. Specify what training, installation or preparation is needed and who will check that everything is ready.

Maintain a change register. Record the decision, its rationale, the consultation, any contractual consent and the applicable versions of documents. This helps prevent disputes about which instruction applied at a particular time.

An accelerated process may be needed for urgent legal or safety-related changes. Define this exception in advance and limit it to what is necessary. Urgency must not become a routine argument for bypassing consultation on commercial changes.

Finally, schedule a review. Compare actual costs, disruption and results with the proposal, and make adjustments where needed.

Practical takeaway: before launching your franchise network, write a change procedure covering categories, decision-making powers, consultation and cost-sharing arrangements. Ensure it aligns with your agreement and have it legally reviewed. This will help you build a franchise network that can innovate without taking business owners by surprise.