Buying a franchise: check the requirements for your personal involvement

A franchise may look financially attractive yet still be a poor fit for the time you have available. Some arrangements require you to manage the business yourself day to day; others allow you to appoint a manager. When joining a franchise network, you therefore need to assess not just the costs, but also the level of personal involvement expected. Before signing, find out what happens if you cannot be there every day.

1. Clarify what personal involvement means

An obligation to ‘devote yourself fully’ to the business may sound straightforward, but it can conceal different expectations. Does the franchisor mean that you must take overall responsibility, serve customers yourself or be present throughout opening hours? These distinctions determine whether the business fits your family circumstances, health and any other work commitments.

Check the draft agreement and its schedules for clauses covering personal operation of the business, day-to-day management, attendance and outside activities. Then ask for specific explanations:

• Must you be personally present for a minimum number of days or hours?
• Can a manager oversee day-to-day operations?
• Which tasks are you not allowed to delegate to staff?
• Do you need permission to run another business or take paid employment?
• Are training sessions and meetings compulsory, including outside opening hours?

Distinguish between the outlet’s opening hours and your own working hours. A shop that must open six days a week does not automatically require your personal presence on all six days. Equally, permission to hire staff does not necessarily mean you can hand over management entirely.

Have any unclear terms clarified in the agreement or an accompanying written arrangement before signing. A workable rota starts with clear obligations.

2. Make effective use of Dutch disclosure requirements

The Dutch Franchise Act has applied since 1 January 2021 and is set out in Book 7, Title 16 of the Dutch Civil Code, Articles 7:911 to 7:922. Among other things, it imposes disclosure requirements before a franchise agreement is concluded.

The franchisor must provide the draft agreement and its schedules. They must also provide other information that they know, or can reasonably be expected to suspect, is important to your decision. A requirement to be present every day, or a restriction on appointing a manager, may be material to that decision.

Explain early on how you intend to organise the business. For example, do you want to work alongside a partner or employ a manager on an ongoing basis? Ask explicitly whether the proposed franchise model and agreement allow this. That makes clear which information is relevant to your choice.

Under Article 7:915 of the Dutch Civil Code, you also have a duty to investigate: within the bounds of reasonableness and fairness, you must take steps to avoid signing on the basis of incorrect assumptions. Do not leave uncertainties unresolved.

The law does not give you a general entitlement to holiday leave, cover during illness or exemption from personal involvement requirements. You are an independent business owner, not an employee of the franchisor. For franchisees established in the Netherlands, these statutory franchise rules cannot be departed from to their detriment, but practical arrangements for cover still need to be carefully worked out.

3. Arrange cover before you need it

An obligation to operate the business personally becomes particularly important when you are temporarily unable to work. Discuss not just a normal working week, but also holidays, illness and unexpected caring responsibilities. Ask what cover the agreement permits and what approval is required.

A workable arrangement makes clear:

• Who can provide cover: an employee, business partner or external manager.
• What requirements apply: for example, experience, knowledge of the franchise system or completion of a training course.
• How approval works: whom you apply to and the agreed timeframe for a response.
• What happens in an emergency: how the outlet can continue operating immediately.
• What a prolonged absence means: when discussions are required and what further steps may be taken.

These are points for negotiation, not automatic statutory rights. Ask a lawyer specialising in franchising to assess whether the arrangements are consistent with the rest of the agreement.

Pay particular attention to any arrangement that always requires advance approval for cover but has no emergency procedure. Also ask whether someone who has already been approved to cover for you needs fresh approval for a subsequent absence. Clear arrangements help both you and the franchisor maintain business continuity and franchise standards.

4. Calculate whether your staffing plan is viable

Next, focus specifically on the staffing implications of these obligations. Draw up a rota that also accounts for administration, ordering, meetings and training. A business that only works because you routinely cover every unfilled shift is vulnerable.

Ask your accountant to compare two scenarios: day-to-day management by you, and temporary management by a paid replacement. Include not just wages, but also employer on-costs, induction and any compulsory training. Do not treat your own unpaid hours as an unlimited resource.

Discuss the results with the franchisor. Does the rota you need comply with the franchise requirements? Is cover genuinely permitted, or only theoretically possible under conditions that hardly anyone could meet?

Practical conclusion: only sign once you know what personal involvement is required, who can cover for you and whether that cover is affordable. The right franchise network offers not just a recognisable concept, but also arrangements that allow you to run the business sustainably.