Buying a franchise: check the annual consultation arrangements

Choosing a franchise is about more than its brand name and financial returns. You are also joining a franchise community in which business owners and the franchisor will work together for years. That makes the consultation arrangements worth examining before you sign. Who can raise issues, who represents you, and what happens to agreed actions? These checks will help you establish whether consultation is genuinely part of the relationship or largely amounts to an annual presentation.

1. Understand the legal minimum

In the Netherlands, the Franchise Act has been in force since 1 January 2021 and forms part of Book 7, Title 16 of the Dutch Civil Code. It requires the franchisor and franchisee to consult at least once a year. They must also act towards one another as a good franchisor and a good franchisee.

The duty to provide information starts before the agreement is signed. Among other things, the franchisor must tell you how consultation takes place and how often. If there is a body representing franchisees, its contact details must also be provided. This information should inform your assessment of the relationship; it is not something to leave until after you open.

The law does not require every franchise network to have a franchisee association or council. A network without a council is therefore not automatically falling short. Equally, the existence of a council does not prove that your interests are well represented. Always investigate how the arrangements work in practice.

2. Ask how consultation works, not just what it is called

Before signing, ask for a written explanation of the consultation arrangements. Distinguish between discussions about your own outlet and collective consultation about the franchise network. An individual meeting about your performance serves a different purpose from a meeting about shared operational problems.

Ask the franchisor to give specific answers to these questions:

• How often do individual and collective meetings take place?
• Who sets the agenda, and how can you submit items?
• Who attends on behalf of the franchisor, and can that person make decisions?
• Are minutes, decisions and action points shared in writing?
• How are franchisees who cannot attend kept informed?
• How can urgent issues be raised between meetings?

Also ask for recent minutes, anonymised if necessary, and a sample agenda. These will help you judge whether meetings allow room for questions and discussion. A calendar of meetings tells you little unless it is clear how franchisees can put their own issues on the agenda.

3. Check who represents you

A franchisee council can be a useful point of contact, but its name does not tell you what powers it has. A franchisee association may be a separate organisation with members and a constitution. The relationship between the association, council and franchisor varies from one network to another. Ask for the relevant constitutions, rules and contractual provisions.

Check how representatives are elected or appointed, how long they serve and how they report back to other franchisees. Can new franchisees stand for election? Are different types of outlet represented? Can you put questions directly to your representative?

Pay attention to their authority too. A council that gives advice does not automatically have the power to make binding commitments on your behalf. Conversely, the applicable arrangements may give collective decisions consequences for you. Ask a lawyer to assess what such a decision would mean for you personally.

Also distinguish consultation from consent required by law. Certain changes to the franchise system may be subject to a separate consent requirement. The fact that an issue has been discussed at a meeting does not automatically mean that requirement has been met.

4. Make follow-up measurable before you sign

The quality of consultation becomes clearest after the meeting. Ask how action points are assigned, what deadlines apply and how progress is reported. Useful minutes record not only that a problem was discussed, but also who will take it forward and when a response is due.

Take a practical example: several outlets are experiencing recurring faults in a central ordering system. Who collects the reports? Who raises them with the supplier responsible? When will franchisees hear what action is being taken? This allows you to test the consultation arrangements without relying solely on general promises.

Before signing, record any missing arrangements in the agreement or a clearly identified appendix. These might include meeting frequency, the right to submit agenda items and the circulation of minutes. Also check whether the consultation rules can later be changed unilaterally and what that would mean for your position.

Practical conclusion: ask for the consultation arrangements, recent minutes and the rules governing representation. Only sign once you understand how to raise issues, who speaks on your behalf and how agreed actions are followed up.