Arranging permits for your first franchise outlet

Your existing business is doing well, and a franchisee wants to open the same concept elsewhere. Yet local rules could delay that opening or make it impossible. What is permitted at your premises is not automatically allowed at another address or for another business owner. Before making irreversible commitments, agree who will investigate, apply for and check the necessary permissions. This helps build a franchise community in which business owners know where they stand.

1. Turn your franchise concept into a permits checklist

Do not start with a generic list of permits. Start with the activities your franchise concept actually involves. Do you only sell products, or do you also prepare food, host groups or use outdoor space? These differences determine which rules apply.

Prepare an overview of activities for each proposed outlet. Record which are compulsory elements of the concept and which are optional. Consider:

• use of the premises, including storage and any production;
• alterations, external signage and building installations;
• opening hours, deliveries, loading and unloading;
• outdoor seating, serving alcohol or events;
• fire-safe use of the premises and potential effects on the surrounding area.

Then check the applicable rules through the Omgevingsloket, the Dutch online portal for environmental and planning matters, and with the local municipality. Under the Dutch Environment and Planning Act (Omgevingswet), relevant requirements include the municipal environment plan (omgevingsplan) and any necessary environment and planning permits (omgevingsvergunningen). Not every activity requires a permit: general rules, a notification requirement or a duty to provide information may apply instead.

Certain activities may also require other permissions. Hospitality businesses, for example, may need an operating licence under municipal rules and an alcohol licence under the Dutch Alcohol Act (Alcoholwet). The requirements depend on the activity and local circumstances.

Use your existing outlet as a starting point, not as legal proof. A permission may be tied to a particular address, activity or permit holder.

2. Divide the work between franchisor and franchisee

The franchisee is an independent business owner. That does not mean you, as the franchisor, can simply say: ‘All permits are your problem.’ You know the concept and the fit-out and operating methods you require. That knowledge is essential to preparing an application properly.

Draw up a responsibilities checklist covering five points for each permission: the applicant, the documents to be supplied, the costs, the expected processing time and the evidence required before opening. Also specify who will liaise with the municipality.

One workable arrangement is for you to provide standard drawings, equipment specifications and a description of the activities. The franchisee then has this information checked against the specific premises and submits the application. An adviser can carry out specialist assessments, but record who will review the findings and act on them.

Also agree what happens if the municipality requires changes. Can the franchisee use different external signage, for example? Who decides on changes to an extraction system? This helps prevent conflicts between local compliance requirements and your franchise standards.

Keep applications, decisions, conditions and correspondence in one agreed location. A positive verbal discussion is not the same as a granted permit.

3. Make uncertainties clear before signing the franchise agreement

The Dutch Franchise Act (Wet franchise) has been in force since 1 January 2021. The franchise rules are set out in Book 7 of the Dutch Civil Code. Among other things, they require the franchisor to provide relevant information before the agreement is signed. The prospective franchisee must make reasonable enquiries to avoid entering into the agreement on a mistaken understanding of the circumstances.

A known permit-related obstacle affecting the investment or the viability of the concept should therefore not emerge only after signing. Explain what has been checked, which applications are still pending and which outcomes remain uncertain. Distinguish between an adviser’s estimate and a decision by the competent authority.

The statutory period of at least four weeks following provision of the required pre-contractual information is not a permit procedure. Its expiry does not mean the outlet is allowed to open. During this standstill period, you must not, among other things, require payments or investments in connection with the franchise agreement.

Ask a lawyer specialising in franchising to assess how the agreement should address permissions that remain uncertain. Consider an appropriate condition covering the grant of essential permits, a deadline for a decision and arrangements for costs already incurred if opening proves impossible. Avoid guaranteeing an opening while essential decisions are still outstanding.

4. Document the decision to open

Schedule a separate check of all permissions before opening. Check not only whether a permit has been granted, but also whether the actual layout and activities match the application. Read any conditions relating to matters such as hours of use, capacity or facilities.

Record outstanding issues, assigning a responsible person and a deadline to each. Distinguish between mandatory legal requirements and internal franchise preferences. A commercially driven opening date must never be a reason to ignore a legal obligation.

Also check whether objections, legal proceedings or conditions still to be met create risks. If in doubt, seek specific legal advice: a permit being granted does not automatically remove every risk associated with putting it into effect.

Practical takeaway: create a single permits overview for your first franchise outlet, covering activities, responsibilities, supporting evidence and outstanding risks. Only decide to open once you can demonstrate that the necessary permissions are in place and their conditions have been met.