Buying a franchise: put verbal promises in writing

In introductory meetings, a franchise often sounds appealing: a quick opening, little administrative work or an investment that, according to the person you are speaking to, covers almost everything. But how much of that will hold true when you sign the contract? Franchising is a community in which trust matters. That is precisely why specific promises deserve to be clearly recorded in writing. This guide helps you distinguish between a sales pitch, an expectation and an enforceable commitment.

1. Turn sales conversations into a list of promises

Start keeping a simple record from your very first meeting. Note not only what you are promised, but also who says it, when and subject to what conditions. Keep presentations, brochures, emails and messages in their original form. If a presentation is subsequently revised, there may otherwise be uncertainty about what you originally received.

Divide statements into three categories:

• Facts: for example, that certain equipment is included in the starter package on offer.
• Expectations: for example, that an outlet is expected to open within a certain period.
• Commitments: for example, that the franchisor will complete an agreed task before opening, at no additional charge.

This distinction prevents you from treating an optimistic expectation as a guarantee. For every important statement, ask: is this a description of past experience, an estimate for my situation or an obligation you are undertaking towards me?

After a meeting, send a brief summary and ask for explicit confirmation or corrections. Silence is no reliable substitute for agreement. Record unclear answers as outstanding issues, not as agreed terms.

2. Use the Dutch Franchise Act as your information baseline

The Netherlands has specific franchise legislation: the Dutch Franchise Act (Wet franchise), incorporated into Title 16 of Book 7 of the Dutch Civil Code, Articles 7:911 to 7:922, since 1 January 2021. These provisions include disclosure obligations before an agreement is concluded.

Among other things, the franchisor must provide the draft agreement and its appendices, along with information about fees, investments and other relevant financial obligations. Its disclosure obligations may also cover other information that it knows, or can reasonably be expected to suspect, is relevant to your decision.

You also have a duty to make your own enquiries. Article 7:915 of the Dutch Civil Code requires you, within the bounds of reasonableness and fairness, to take steps to avoid signing on the basis of incorrect assumptions. Asking further questions when the sales pitch differs from the documents is a practical example.

Providing information is not the same as guaranteeing an outcome. An explanation of the usual opening timeframe does not automatically make that timeframe binding for your outlet. If you want to rely on it, you need a clear agreement on who is responsible for what and which conditions apply.

For a franchisee established in the Netherlands, the protections of the Dutch Franchise Act cannot be contractually excluded to the franchisee’s detriment. However, this does not mean that every favourable sales statement automatically becomes part of your agreement.

3. Compare promises with the full set of contractual documents

Check your list of promises against the draft agreement and all its appendices. For each important point, find the corresponding clause. Is it missing, or does it say something different? Ask for written clarification before proceeding.

Pay particular attention to clauses governing the relationship between documents. A contract might, for example, state that its main text takes precedence over its appendices. It may also contain a clause stating that the written contract sets out everything agreed between the parties and supersedes earlier statements. This is often called an entire agreement clause.

Such a clause does not make earlier statements legally irrelevant in every circumstance. Its interpretation and effects depend on the circumstances. It is, however, a clear reason not to rely solely on a brochure or a standalone email.

Take the statement: ‘The starter package includes everything needed to open.’ If the contract then excludes necessary installation costs, you have a specific contradiction. Make sure the documents specify which items are included, which are not and who bears any additional costs.

If in doubt, ask a lawyer specialising in franchise law to assess how the documents should be read together. A verbal agreement can have legal significance, but proving and interpreting it can be difficult.

4. Make decisive promises verifiable

Not every reassuring statement needs to go into the contract. Focus on commitments without which you would not proceed, or for which you would negotiate a different price.

A workable commitment sets out:

• exactly what will be supplied or done;
• which party is responsible;
• when it must happen;
• which conditions and exceptions apply;
• what the parties will do if the commitment is not fulfilled.

Have essential commitments included in the agreement or in a signed appendix expressly forming part of it. Also check that the person agreeing on the franchisor’s behalf has the authority to make that commitment.

If a decisive promise is deliberately left vague, do not treat it as a certainty when deciding whether to buy. Where information is contradictory or potentially misleading, seek legal advice on your position; termination, damages or the setting aside of the agreement do not follow automatically.

Practical takeaway: before signing, create a single list of decisive commitments and where each appears in the contract. If an essential promise is not clearly recorded anywhere, resolve that first.