Becoming a franchisee? Check your franchise contract

A franchise contract is a very important document. Signing it signifies a long-term commitment between the franchisor and the franchisee. It not only dictates how the collaboration will proceed but also has a significant impact after the partnership ends. For instance, it often includes a non-compete or non-solicitation clause, describes how goodwill is divided upon sale, and determines the ownership of customer data. Additionally, the franchise contract is often filled with legal terminology. This makes it unclear for non-lawyers what exactly is meant. All the more reason to sign only if it is well put together!

You want to become a franchisee, so do a contract check first!

If you want to become a franchisee, signing the contract is an important life choice. For at least the duration of the contract, and often longer, you will be engaged with your franchise business almost daily. A franchise contract is a formal document that cannot be unilaterally modified during its term. You are not entering an employment agreement with many legal protections that can be terminated with few consequences, but rather becoming an independent entrepreneur. Therefore, it's crucial to ensure it is balanced.

There are many questions we analyze as part of a contract check. For example:

• Are the rights and obligations clearly defined?
• Are the rights and obligations between the franchisor and franchisee balanced?
• Can you still practice your profession effectively after the end of the franchise collaboration, or are you overly restricted by the non-compete and/or non-solicitation clause?
• Are your interests as well defended as those of the franchisor?
• Does the franchise contract comply with the Franchise Act?

What can you expect from a contract check?

• Your contract will be treated with utmost confidentiality.
• After providing the contract and assignment, you will receive feedback within a week.
• You will receive a list of points for adjustment or negotiation.
• We will explain the points of attention personally and answer all your questions via phone or conference call.
• We offer both Dutch and English contract checks.

We provide you with prompt clarity so that entering into the franchise partnership doesn’t need to be delayed. If desired, we can then offer support in making adjustments to the contract or conducting negotiations between the franchisor and you as the franchisee. It is extremely important that when you become a franchisee, you make a decision based on the right information.