Set up franchise consultation before taking on your first franchisee

If you are turning an existing business into a franchise, you will be used to making decisions yourself. That changes with your first franchisee: you are building a network of independent business owners. Effective consultation prevents local experiences from going unheard and expectations from drifting apart. Before your first franchise relationship begins, put a simple consultation structure in place, with clear arrangements for sharing information, keeping records and following up.

1. Understand the legal minimum for consultation

In the Netherlands, the Dutch Franchise Act (Wet franchise) forms part of Book 7 of the Dutch Civil Code, Articles 7:911 to 7:922. Among other things, Article 7:916 requires the franchisor and franchisee to consult at least once a year. This is a minimum, not an indication that one meeting is enough for every franchise system.

The parties must also act as a good franchisor and a good franchisee. An annual meeting without preparation or room for questions is not consistent with a properly managed relationship. Choose a frequency that reflects day-to-day needs. A newly opened outlet, for example, may need business progress meetings more often than one that has been operating steadily for years.

The consultation structure also matters before the franchise agreement is signed. The information that must be provided by law includes how and how often the parties will consult. Decide how this will work in advance; a promise that you are always available is not enough.

Also distinguish between consultation and consent. A discussion or a favourable set of minutes does not replace any consent the law may require for certain changes to the franchise system. Have the legal effect of decisions assessed separately.

2. Design a structure that suits your first franchised outlet

Start small. You do not need complex committees for a single franchisee. You do, however, need clarity about which meetings will take place and what they are for. A useful structure is:

• Operational contact: brief discussions about day-to-day issues, such as deliveries or a system failure.
• Regular progress meetings: prepared discussions about results, customer feedback and recurring problems.
• Annual relationship review: a broader assessment of the working relationship, mutual expectations and priorities for the following year.

For each type of meeting, agree who will attend, who will prepare the agenda and who will track actions. Schedule the annual meeting at the outset. This helps prevent it from being lost among operational pressures and plans for new outlets.

Record the main arrangements in the franchise agreement or an appendix. Cover frequency, each party’s right to add agenda items, preparation, minutes and a process for unresolved issues. Practical details can go in a consultation protocol, provided the documents do not contradict one another.

Bear in mind your own dual role. As both the owner of an existing outlet and the franchisor, your interests will not always align with those of the franchisee. Make clear which role you are speaking from when discussing an issue, such as the allocation of local enquiries.

3. Use a standard agenda and relevant information

A good discussion starts not with a pile of figures, but with a clear question: what do we need to understand or improve together? Use a standard agenda and give both parties room to add items.

Topics might include the outlet’s development, recurring customer complaints, how well shared systems work and progress on previous commitments. Explicitly ask which requirements of the franchise system are unclear in practice. Your first franchisee may reveal problems that you routinely resolve in your own business without even noticing.

Send the agenda and relevant documents far enough in advance to allow time for preparation. Define financial terms consistently: comparing turnover inclusive of VAT with turnover exclusive of VAT, for example, causes confusion. Clearly distinguish facts, assumptions and proposals.

The Dutch Franchise Act also requires annual disclosure of the extent to which mark-ups or other financial contributions from franchisees cover the costs or investments for which they are intended. Add a separate agenda item for this where necessary; a general discussion about satisfaction is no substitute for providing this information.

Share only the data needed. Wherever possible, use anonymised examples when discussing customer complaints. The GDPR also applies when personal data is processed within your franchise network.

4. Make follow-up trackable and scalable

End each meeting with a short action list: what will happen, who is responsible and when will they report back? Record any outstanding issues too. This prevents an idea discussed at a meeting from later being presented as a final decision.

Send draft minutes and give the franchisee an opportunity to correct factual inaccuracies. Clearly record any disagreements. Do not automatically treat silence as consent to new obligations.

As the network grows, a franchise council or group meeting may become useful. If so, set out who is represented and what authority the representatives have. Collective consultation does not automatically remove the need to address individual questions or respect statutory rights.

Practical takeaway: before signing your first franchise agreement, create one consultation calendar, one standard agenda and one action-list template. Have the legal arrangements reviewed and, after the first few meetings, assess whether the structure is genuinely helping.