Franchise Act update
Have your franchise agreement, franchise manual, and recruitment & selection process already been adjusted to the Franchise Act?
About this content: This page addresses the Dutch Franchise Act (Wet Franchise), which applies to franchise agreements involving the Dutch market. Looking to enter the Dutch market from abroad? See our international brands page. For information on franchise law in other jurisdictions, schedule a discovery call.
The Dutch Franchise Act (Title 7.16 of the Dutch Civil Code) has been in force since 1 January 2021. It emphasises four key areas deemed crucial by the government for balanced franchise collaborations:
- The pre-contractual exchange of information.
- The interim modification of an ongoing franchise agreement.
- The consultation between the franchisor and its franchisees.
- The termination of the franchise collaboration.
Curious about what these components of the Franchise Act entail? Read our extensive explanation, in non-legal language, in this article.
Implications of the Franchise Act
Three subjects carried a two-year transition period, for franchise agreements that were already running on 1 January 2021: the non-compete clause, the right of consent, and the valuation of goodwill. That transition period expired on 1 January 2023.
The Franchise Act therefore applies in full to every franchise agreement, including contracts concluded before 2021. It is also mandatory law: parties cannot deviate from it to the detriment of the franchisee. An agreement that has never been updated may contain provisions that can no longer be relied on in practice. This has major implications for your franchise agreement, franchise manual, and the recruitment & selection process.
In practice we see that not every franchise organisation has completed that step. Sometimes the franchise agreement has been updated, but the franchise manual or the recruitment and selection process has not. It also happens that the written agreements are sound while day-to-day practice has drifted away from them. That combination is exactly what creates risk in a dispute.
A natural moment to review this is when an agreement is renewed or newly concluded. An agreement can then be signed that remains appropriate throughout its term. It is also an excellent opportunity to review the entire franchise agreement for content, accuracy and currency. Koelewijn & Partners will efficiently and comprehensively carry out this update for you!
What to expect from a Franchise Agreement update?
Our Franchise Agreement Update ensures that you know what needs to be done to make your franchise organisation ‘Franchise Act-proof’. While reviewing the franchise agreement, we will also immediately check if it is still up-to-date with your franchise organisation.
What do we offer?
- After receiving your current franchise agreement, we will review it in light of the Franchise Act, accuracy, and current relevance.
- You will receive your amended franchise agreement back from us, in accordance with the Franchise Act.
- We will explain the adjustments via phone, an appointment, or a video conference call.
Implementing other check-up findings
After adjusting your franchise agreement to the Franchise Act, we will inform you about further action points needed to comply with the Franchise Act. If desired, we can also implement these action points for you. Consider the following aspects:
- If there are additional points of attention in the franchise agreement, we will report, identify, and adjust them based on after calculation as needed.
- Prepare the PID template for your franchise formula. We will request all relevant information from you and draft a basic Precontractual Information Document for your franchise organisation.
- The changes made to the franchise agreement also have implications for your franchise manual. Therefore, we can conduct a consistency check between your franchise manual and franchise agreement for you. Additionally, we will also assess your franchise manual in general.
