Your first franchise in Belgium: preparing a robust pre-contractual information document

Turning an existing business into a franchise network takes more than an attractive offer for prospective franchisees. Before anyone signs, you must give them insight into the proposed relationship and its economic context. The pre-contractual information document, known in Belgium as the PID, plays a central role. This guide helps you compile, check and carefully deliver your first disclosure pack.

1. Understand what the Belgian framework requires

Belgium has no standalone law governing every aspect of a franchise agreement. It does, however, have specific, mandatory rules for the pre-contractual phase: Title 2 of Book X of the Belgian Code of Economic Law (known by its Dutch abbreviation, WER). Article I.11, 2° defines the commercial cooperation agreements covered by these rules. Franchise agreements generally fall within their scope.

The core obligation appears in Article X.27 WER: the prospective franchisee must receive both the draft agreement and a separate PID at least one month before the agreement is concluded. These must be provided in writing or on an accessible, durable medium. A presentation about your business or a sales brochure is no substitute for these documents.

Article X.28 WER sets out the information the PID must contain. The Act of 9 February 2024 amended these content requirements, applying them to agreements concluded, amended or renewed from 1 September 2024. Do not therefore use an old template without having it legally reviewed.

General contract law and the rules on unfair terms between businesses also remain relevant. The European Code of Ethics for Franchising is a self-regulatory code, not a replacement for statutory obligations. For your first disclosure pack, it is sensible to seek a review by a Belgian lawyer experienced in commercial cooperation agreements.

2. Create two clear information sections

The PID has two sections: important contractual provisions, and information needed to assess the commercial cooperation agreement properly. Use the current statutory list as your guide; the approach below is not a comprehensive legal checklist.

Start with the contractual section. Work from a sufficiently developed draft agreement. Bring together the provisions the prospective franchisee needs to understand the relationship, including financial obligations, duration, termination and relevant restrictions. Have a lawyer check which provisions must be expressly included under the current law.

Make the financial arrangements specific. For a turnover-based fee, for example, it must be clear which turnover forms the basis of the calculation. Also identify any separate charges payable for software, training or joint marketing. Avoid making prospective franchisees piece together the total cost from scattered appendices.

Then develop the economic section. Gather the legally required information about matters such as your business, experience, franchise concept, market and network. A first-time franchisor must be transparent about having no franchisees operating yet. The results of your own business are not the results of an established franchise network.

Also check the information about the rights that allow you to offer the franchise concept. Who owns the trade mark? Is your business entitled to authorise its use? Ensure that the PID, the agreement and any trade mark licences are consistent.

3. Make your figures verifiable, not merely persuasive

In an existing business, sales figures and costs are often spread across accounting records, till systems and internal reports. Create a supporting evidence file alongside the PID. For each figure, record the source, the period covered, the calculation method and who checked it.

Always distinguish between:

• Historical results: what your existing outlet has actually achieved.
• Assumptions: for example, about rent, staffing levels or opening hours.
• Forecasts: calculations for a future outlet based on explicit assumptions.

Do not present your own business's profits as though every prospective franchisee could achieve them. You may pay unusually low rent or carry out work yourself for which a franchisee would need to employ staff. Explain these differences when using figures during recruitment.

Next, check that all your documents are consistent. Does your brochure promise extensive guidance while the agreement provides only limited support? Is the same marketing contribution described consistently throughout? Such discrepancies undermine trust within your franchise network and can lead to legal disputes.

4. Manage delivery and monitor the waiting period

Appoint one person to manage the final documents. Give the draft agreement, PID and appendices a version number and date. Keep evidence of what the prospective franchisee received and when. If you send documents electronically, the recipient must actually be able to open and retain the files.

Schedule the statutory period as one month, not automatically as thirty days. During this protected period, as a general rule, no commitments may be entered into and no fees, payments or security may be requested or provided. Specific exceptions apply to confidentiality. Have any confidentiality agreement reviewed in advance, and do not use a reservation payment as a workaround.

Does the offer change after delivery? Seek advice on whether revised documents and a new waiting period are required. Collect prospective franchisees' questions in writing and keep a record of your answers.

Non-compliance can have serious consequences. Certain breaches may allow the franchisee to seek to have the agreement declared null and void within two years of its conclusion. Treat the PID as a carefully prepared basis for an informed decision, not an administrative formality.

Practical takeaway: first make the agreement and supporting information consistent, then have the PID legally reviewed, and only then schedule delivery and signing.