Territorial arrangements in your Belgian franchise agreement

When you expand an existing Belgian business through franchising, you bring existing customers, delivery routes and online orders with you. Who will be entitled to serve them? Clear territorial arrangements prevent unexpected competition between your own outlet and new franchisees. They help you build a franchise network in which each independent partner understands their commercial scope, without unlawfully restricting access to customers or sales channels.

1. Map your existing customer flows

Start with the realities of your existing business, not circles on a map. A shop draws customers from a different catchment area than a maintenance service working in customers’ homes. Accessibility, language, travel time and delivery costs may also matter more than municipal boundaries.

Gather enough data to identify typical busy and quiet periods. Use aggregated data wherever possible: an initial territorial analysis will not usually require individual customers’ names.

Distinguish between:

• Where customers are based: where do they live or work?
• Where orders are fulfilled: where do you deliver goods or provide services?
• The sales channel: your own outlet, online shop, telephone or a third-party platform.
• Existing commercial arrangements: for example, deliveries to a business with several sites.

Then identify which sales currently belong to your own business. A prospective franchisee should not discover that you already serve a large share of the anticipated local demand and that those sales fall outside their agreement.

The result is a working map, not a promise of turnover. Use it to discuss assumptions, and encourage candidates to assess the local potential independently too.

2. Define exactly what you are granting

An operating territory is not automatically an exclusive sales territory. Start by writing down in plain language what you intend to promise, before a lawyer turns this into contractual provisions.

Distinguish, at a minimum, between the right to open an outlet, any protection against new outlets and arrangements for actively targeting customers. These are separate issues. For example, you might undertake not to open a second physical outlet within a defined area without preventing customers there from ordering from another outlet.

Set out the boundaries on a dated map and in a verifiable written description. Avoid relying solely on phrases such as ‘the Antwerp region’ or ‘the wider area’. Specify which takes precedence if the map and the text do not fully match.

Explicitly discuss the following:

• Does the protection also apply to your own outlets?
• Are temporary sales outlets and collection points covered by the same arrangement?
• Which existing business customers will continue to be managed centrally?
• What happens if a municipal boundary or postcode changes?

Do not link territorial protection to vague expectations such as ‘sufficient growth’. If you want performance to play a part, agree measurable criteria, a review procedure and a reasonable opportunity to remedy shortcomings in advance. Have the consequences of such a review checked by a lawyer too.

3. Set rules for online orders and borderline cases

Most disputes arise not at a clearly defined shop boundary, but when customers combine channels. Someone sees a national campaign, orders online and collects their purchase from a franchisee. Who receives the sales revenue, who bears the fulfilment costs and who handles the return?

Create a short decision matrix for these situations. For each scenario, record who helps the customer, who issues the invoice, who fulfils the order and how any internal payments or cost allocations are handled. Keep these arrangements consistent with what customers are told.

For example, work through the following cases:

• An online enquiry comes from a franchisee’s territory.
• A customer makes an unsolicited request for services from an outlet outside the area where they live.
• A business customer wants a single point of contact for several Belgian sites.
• A franchisee is temporarily unable to fulfil an order.

Territorial arrangements are not a licence to restrict competition. Belgian and EU competition law are relevant. Restrictions on passive sales, such as responding to unsolicited customer requests, are particularly sensitive legally. Nor can you simply ban online sales or restrict them geographically. Ask a specialist lawyer to assess which restrictions are permitted within your distribution model.

4. Formalise the arrangements before anyone signs

Belgium has no single, comprehensive franchise law, but commercial cooperation agreements are subject to specific pre-contractual disclosure requirements. These are set out in Book X, Title 2 of the Belgian Code of Economic Law, Articles X.26 to X.34.

The candidate must receive the draft agreement and the pre-contractual disclosure document at least one month before entering into the agreement, in writing or on an accessible, durable medium. Make sure these documents accurately reflect the proposed territorial rights, exceptions and relevant restrictions. If you change these arrangements during negotiations, seek advice on whether updated information and a new waiting period are required.

General contract law and Belgian rules on unfair terms between businesses also apply, among other provisions. An unrestricted right to reduce a territory unilaterally therefore warrants particular legal scrutiny.

Instead, establish a clear consultation procedure for expansion, relocation and territorial overlap. Specify which data the parties will review, who makes the decision and how disputes will be handled.

Practical conclusion: before making your first territorial commitment, prepare three documents: a customer flow map, a summary of the rights being granted and a decision matrix for borderline cases. Have them reviewed together by a lawyer and incorporate them consistently into your contractual documentation.