Franchising

An Expert's View about Law and Compliance in Belgium

Last updated: 11 Apr 2011

Belgium’s franchising system represents about 3,500 franchisees, 30,000 jobs, and $3.5 billion.

Franchising represents 6% of all retail in Belgium compared with the European and American averages of 11% and 40%, respectively. This places Belgium, along with Denmark and Finland, among the European countries with the lowest number of franchise units per capita. Over the past 10 years the franchising of services has grown significantly. Services such as hotels, hairdressing and car maintenance have shown an important increase, while sub-sectors such as building maintenance services, security, car-washing, travel and tourism, express delivery, personnel training and accounting services are also expanding.

Regarding franchising regulation, a law relative to pre-contractual information in the framework of commercial partnership agreements was adopted in 2005. The law went into effect on February 1, 2006. The franchiser is obliged to provide the prospective franchisee with the draft agreement and a separate document containing important contractual clauses. This document must also include additional details, so as to allow the franchisee to accurately evaluate the contractual relationship. The required information must be given to the franchisee at least one month before entering into the franchising agreement. Additionally, franchises are also subject to EU regulations regarding vertical and horizontal restraints, more specifically 12790/1999 or the “block exemption”, which exempts a smaller franchise network from complying with the principles of free trade of article 81(3) of the Treaty of Rome. So far, no franchise system has failed to qualify for the block exemption. For more information on the “block exemption,” please see: http://www.eff-franchise.com/.

Since its foundation in 1972, the European Franchise Federation (EFF) has had the European Code of Ethics for Franchising. Its purpose is to promote a self-regulatory approach to the ethical business practice of franchising in Europe, and to set the standards of this self-regulation. The Code of Ethics has proved itself fundamentally useful not only to self-regulate the practice of franchising on the markets in Europe, but by doing so, has guaranteed the EFF a forceful and credible role in its dealings as the federal representative of franchising, with both national and European authorities. In the 1980s, the EU and the European Court of Justice recognized the EFF’s Code as the leading example of its kind, both in its definition of franchising and in its responsible practice of this method of distribution. Every EFF national member, and in turn each franchise system member of the national franchise associations (or federations), commits itself through its membership, to the principles laid down in this Code.

Read the complete guide to Doing Business in Belgium


Posted: 10 April 2011, last updated 11 April 2011

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