Franchise agreement

Franchising is a method of doing business whereby one company (the "Franchisor") enters into a contract with another company (the "Franchisee") whereby it is agreed that the Franchisee receives from the Franchisor the right to use a business with a recognisable business concept (the Franchise formula) including the trade name of the Franchisor for a certain period of time within a certain territory in return for payment (often exclusively).

When do you enter into a franchise agreement?

You enter into a franchise agreement if you wish to expand your concept, for example to other cities or countries, without opening new branches yourself. You give someone else the right to take over the concept you have come up with, under the conditions you determine in the franchise agreement.

The franchise agreement in the law

Dutch law does not provide a separate arrangement for the Franchise Agreement. This means that the general rules of contract law apply. As a result, (more) value is attached to the content of the franchise agreement and jurisprudence. In many cases, however, the European Code of Honour on Franchising does apply. This sets out standards and rules of conduct that guide cooperation in the case of Franchise.


Usually a franchise right is granted against payment of a one-off fee in advance ('entrance fee') and a periodic 'fixed' or turnover-linked fee ('franchise fee'). Advertising contributions' are also often required by the franchisor.

Important features: support and duty of care

An important feature of franchising is continuous support and guidance from the franchisor. The Franchisor also retains control over the way in which the Franchisee conducts its business, in order to monitor and maintain the identity and image of the franchise organisation; and carries out its task of developing the formula. Moreover, the Franchisees have an independent and far-reaching duty of care. This duty of care implies, among other things, that interim - financial objectives are realistic and achievable, and that the Franchisor must independently support the Franchisee in this respect.

Need help with a franchise agreement?

Would you like support in drawing up and negotiating a workable and legally clear franchise agreement? Our lawyers will be happy to assist you. Feel free to contact us for more information.

Specialist franchise agreement

Frank Blatter

Frank Blatter

Franchising is a good way to expand your concept and it brings several (financial) advantages, since for example some financial risks are limited.
Frank Blatter - Specialist

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