Launching a franchise in Belgium: protect your confidential know-how

Turning your existing business into a franchise network means sharing knowledge. But not every prospective franchisee needs immediate access to your recipes, costing models or commercial methods. The challenge is to provide enough information for an informed decision without unnecessarily exposing your trade secrets. A phased approach protects what makes your franchise concept distinctive while building trust with future franchisees.

1. Identify which knowledge is genuinely confidential

Start by listing the information that gives your business a practical advantage. This might include a proprietary preparation method, a detailed planning model, specific equipment settings or a method for calculating accurate quotations. A widely known sales technique does not become confidential simply because you label it as such.

Distinguish between three categories:

• Public information: your market positioning, publicly available products and services, and the customer experience people can observe.
• Information for assessment: substantiated information that allows a prospective franchisee to assess the proposed relationship and its risks.
• Operational secrets: detailed procedures that are only needed during training and day-to-day operations.

This classification is an internal tool, not a way to limit statutory disclosure obligations. You cannot simply withhold confidential information if the law requires you to disclose it.

In Belgium, trade secrets are protected under the Code of Economic Law. To qualify for protection, information must, among other things, be secret, have commercial value because it is secret, and be subject to reasonable measures to keep it confidential. Merely declaring that everything is confidential is therefore not enough.

For each important secret, record who needs access, where it is stored and what protection is already in place. Also check that you have the right to share that knowledge: material belonging to a supplier or external adviser is not automatically yours to pass on.

2. Share information in stages without sidestepping Belgian rules

Plan in advance what information you will provide and when. An initial meeting can draw on public information and a general introduction to your franchise concept. Once a prospective franchisee wants to explore the opportunity seriously, provide a more detailed information pack whose contents can be verified.

In Belgium, the pre-contractual stage is specifically governed by Book X, Title 2 of the Code of Economic Law, concerning commercial cooperation agreements. For agreements covered by these rules, the prospective franchisee must receive both the draft contract and the separate pre-contractual information document at least one month before the agreement is concluded. These must be supplied in writing or on a durable, accessible medium.

During this statutory period, as a general rule, no commitments may be entered into and no fees, sums of money or security may be requested or paid. The law does, however, provide an exception for commitments under a confidentiality agreement. A statutory duty of confidentiality also applies to information the parties obtain with a view to the proposed cooperation.

Have a legal adviser assess in advance how your confidentiality agreement fits into this process. Do not use it as a disguised reservation arrangement, payment obligation or commitment to become a franchisee later.

Share operational details only when they are needed, but provide all legally required information on time. Ask a lawyer to check whether your phased approach genuinely allows the prospective franchisee to make an informed decision.

3. Make confidentiality specific and mutual

A useful confidentiality agreement does more than prohibit forwarding information. Specify the purpose for which the recipient may use it: for example, solely to assess a potential franchise relationship.

Discuss at least the following points with your legal adviser:

• What information is protected, including verbal explanations and demonstrations?
• What exceptions apply, for example to information that was already lawfully known or publicly available?
• May the prospective franchisee’s lawyer, accountant and finance provider see the documents, and on what terms?
• How will copies, the return of documents and deletion be handled if discussions end?
• How long do the obligations last, and what happens if a leak is suspected?

You may also receive confidential information, such as details of a prospective franchisee’s assets or business plan. A mutual arrangement is appropriate for a franchise network of independent business owners.

Avoid excessive penalties and open-ended wording. Alongside the specific pre-contractual rules, general contract law and, where applicable, Belgian rules on unfair terms between businesses also play a role. A confidentiality clause is not a substitute for a separate non-compete clause that has been legally reviewed.

4. Support your agreements with everyday working practices

Store sensitive documents in a secure environment with individual access permissions. Do not routinely send your entire knowledge base as an attachment. Keep a record of which version you share, when and with whom, and revoke access as soon as discussions end.

Set clear boundaries during site visits. Show how the customer experience works, but do not allow prospective franchisees unsupervised access to customer files, staff data or confidential supplier agreements. Personal data is also subject to the GDPR; confidentiality arrangements do not replace those rules.

Test your approach with a simulated prospective franchisee journey. Can you demonstrate afterwards what information was provided, which agreements applied and who had access? If not, simplify the process until your team can follow it consistently.

Practical takeaway: protect your know-how with a clear inventory, legally reviewed agreements and restricted, documented access. Share enough information for an informed decision, and release operational secrets when they are genuinely needed.