Starting a franchise in Belgium: get your customer data arrangements right

Your existing business probably has a customer database, a booking system or a loyalty card scheme. Once an independent franchisee starts using it, responsibilities change. Customer data cannot automatically be shared throughout the franchise network. Before launching your first franchise, map out who needs which data, for what purpose and under what arrangements.

1. Start with data flows, not software

A central customer management system may seem efficient, but first decide what you want it to do. Confirming an appointment, handling a complaint and sending a marketing campaign are different processing activities. They do not necessarily require the same data or the same access.

For each processing activity, record:

• which customer data is collected;
• where it comes from;
• what it is used for;
• which business and staff members have access;
• which software providers are involved;
• when the data is deleted or anonymised.

Include less visible channels too: contact forms, shared inboxes, point-of-sale systems, CCTV footage and spreadsheets. A well-secured central system offers little protection if staff download entire customer lists onto personal devices.

Practical example: a franchisee needs contact details to fulfil an order. As the franchisor, you want to compare sales trends. Aggregated figures may be enough for that, without names or email addresses. Do not collect more personal data centrally than the specific purpose requires.

2. Determine data protection roles for each processing activity

Belgium is subject to the General Data Protection Regulation (GDPR) and the Belgian Act of 30 July 2018 on the protection of natural persons with regard to the processing of personal data. These rules also apply within a franchise network.

The franchise agreement alone does not determine each party’s data protection role. What matters is who actually determines the purposes and essential means of the processing.

There are three main situations:

• Separate data controllers: each business decides for itself why and how it processes particular customer data. Sharing data then requires a separate legal assessment; a data processing agreement is not enough.
• Joint data controllers: the franchisor and franchisee jointly determine the purposes and essential means. Article 26 GDPR then requires an arrangement setting out their respective responsibilities. The essence of that arrangement must be made available to customers.
• Data controller and data processor: one party processes data solely on behalf of, and on the instructions of, the other. This requires an agreement that complies with Article 28 GDPR.

A business can have different roles for different processing activities. Assess local sales records, a shared loyalty card scheme and central marketing separately. Have the proposed allocation of roles legally reviewed before drawing up standard documents.

3. Distinguish customer service from marketing

A customer who buys from one outlet does not necessarily expect advertising from every business in the network. A shared brand does not automatically turn separate businesses into a single data controller.

Identify the lawful basis for each purpose. Data needed to fulfil an order, for example, may be processed to perform that contract. Statutory record-keeping obligations may provide another lawful basis. For marketing, you must separately assess both the lawful basis and the rules governing the communication channel.

Advertising by electronic mail is subject to Belgian rules on electronic advertising as well as the GDPR. Do not assume you can reuse customer addresses without restriction. Any exceptions to prior consent come with conditions and do not automatically extend to other businesses within the franchise network.

Make sure your privacy notice clearly explains who is responsible, what the data is used for, who it is shared with and how customers can exercise their rights. Where consent is required, it must not be hidden in general terms and conditions.

Also establish one clear route for requests to access or erase data, and for objections to processing. Agree internally who receives, forwards and responds to requests, so customers are not passed back and forth between an outlet and head office.

4. Put the arrangements in place before signing

Belgium has specific pre-contractual disclosure requirements for commercial cooperation agreements, including many franchise agreements. These are set out in Book X, Title 2 of the Belgian Code of Economic Law. Under Article X.27, the prospective franchisee must receive the draft contract and pre-contractual disclosure document at least one month before entering into the agreement, in writing or on a durable, accessible medium.

Make any mandatory customer management systems, associated costs and restrictions on data use clear in the contractual documentation well in advance. Seek advice on which important provisions must also be explained in the disclosure document. A data protection annex does not replace this disclosure obligation.

Specify who manages access rights, checks software providers and carries out deletion. Avoid vague wording claiming that all customer data is your ‘property’. This does not establish a lawful basis for processing or override customers’ rights.

5. Test access and incident handling before opening

Use fictional customer data to test whether staff can see only the information they need. Also check what happens when someone changes role, leaves the business or sends a customer list to the wrong recipient.

Create a short incident procedure with named contacts and escalation steps. A processor must notify the controller of a personal data breach without undue delay. The controller then assesses whether notification to the Belgian Data Protection Authority is required, where feasible within 72 hours of becoming aware of the breach. Not every incident must be reported, but the assessment should be documented.

Practical takeaway: start using real customer data only when your data flows, data protection roles, customer information and access rights are aligned. This gives your franchise network a workable foundation without unnecessary data protection risks.