Franchise agreement
Your concept store in Utrecht is doing so well that entrepreneurs in Groningen and Breda are asking if they can copy it. Same name, same interior, same collection. Franchising makes that possible. They invest and run the business for their own account, you supply the formula and are paid for it. Since 2021, though, Dutch law sets out exactly what you have to show a candidate in advance, and how long you then have to wait before signing.
Under a franchise agreement you give someone else, for a fee, the right to operate your formula, and also the obligation to do so in the way you prescribe (Article 7:911 of the Dutch Civil Code). That formula includes at least a trade mark, trade name or house style, and know-how. Know-how here means practical knowledge drawn from your own experience, which is secret and actually matters. The rules have been in Title 16 of Book 7 of the Dutch Civil Code since 1 January 2021, introduced by the Dutch Franchise Act (Wet franchise).
Need a franchise agreement drafted or reviewed? Call 020 675 88 21 or get in touch. You will have a reply within one working day.
The difference between franchising, distribution and a commercial agent
If you want to take a brand to other cities or countries, you have more than one option. A distributor buys your products and resells them in its own name, but does not have to recreate your shop. A commercial agent only brings in deals for you and earns commission. Franchising is about the whole package. The name above the door, the interior, the range and the way staff help customers. That is what the franchisee pays for, often with an entry fee followed by a fixed fee or a percentage of turnover.
You usually record that uniformity in a franchise manual. If the manual is an annex to the agreement, it is part of the documents you give the candidate in advance (Article 7:913(2)(a) of the Dutch Civil Code). So don’t leave writing it until the first franchise store has opened.
More about the distribution agreement →
Dutch Franchise Act: disclosure and a four-week standstill for the franchisee
Under Article 7:914 of the Dutch Civil Code, a franchisor must give a prospective franchisee the draft franchise agreement and the information required by law at least four weeks before the agreement is concluded. In practice that means the draft with all its annexes and an overview of the fees, mark-ups and investments you expect from the franchisee. You also explain how consultation with your franchisees works, to what extent you can compete with them yourself (including through a second formula) and which turnover figures they will get to see (Article 7:913(2)).
If you have figures on your own financial position or on the proposed location, and they are relevant, those go in too. If there is nothing yet for that location, you take an outlet you consider comparable and explain why (Article 7:913(3)). Anything else you know or can reasonably suspect matters to the decision, you share as well (Article 7:913(4)).
Then the four-week standstill begins (Article 7:914 of the Dutch Civil Code). During that period you may only change the draft in the franchisee’s favour, you sign nothing that is inseparably linked to the franchise, and you do not encourage the candidate to make payments or investments. A confidentiality agreement is allowed. The candidate has homework too. They give you timely insight into their own financial position and must take reasonable steps not to sign on the basis of wrong assumptions (Articles 7:913(1) and 7:915).
The Court of Appeal in The Hague showed in July 2026 how strict those four weeks are. A gym in Capelle aan den IJssel had suffered smoke damage at the end of 2021 and was looking for somewhere to house its members. On 20 January 2022 its owners spoke to a gym chain for the first time, and a few days later they signed a franchise agreement, a loan and a side letter. The side letter gave the gym until 1 March 2022 to back out. According to the chain, that was as good as the statutory standstill. The court disagreed. A way out afterwards does not replace four weeks to think things over beforehand. That the gym had been enthusiastic at first made no difference. A year and a half later it was still entitled to annul the agreement. The money only partly came back, because the entry fee and the monthly fees were set off against the services the chain had in fact provided (ECLI:NL:GHDHA:2026:2308).
Disclosure and franchisee consent during the franchise relationship
Your duty to inform continues after the start. You notify planned changes to the agreement and investments you require in good time. If you start a derived formula, yourself or through someone else, meaning a chain that resembles yours in recognisable features and sells the same kind of products, you have to announce it (Article 7:916 of the Dutch Civil Code). Every year you show whether the marketing contributions and other mark-ups covered the costs they were meant for, and at least once a year you sit down with each franchisee.
Planning to change the formula, for instance with a new store concept every outlet has to invest in? If the investment, a new contribution or the expected loss of turnover exceeds a level set in the agreement, you need prior consent from a majority of your franchisees in the Netherlands, or from every franchisee affected (Article 7:921 of the Dutch Civil Code). If the agreement sets no level, consent is always required, even for a small change. Including a threshold therefore saves you a lot of consultation later.
Goodwill and non-compete clauses when a franchise agreement ends
Every franchise agreement must set out how it will be determined whether the franchisee’s business has goodwill, how much, and what share of it is attributable to you (Article 7:920 of the Dutch Civil Code). If you take over the outlet yourself at the end, or hand it to a new franchisee, the contract states how the goodwill belonging to the departing franchisee is compensated.
A ban on opening a competing shop afterwards is only valid if it is in writing, is limited to competing goods or services, is indispensable to protect your know-how, lasts no longer than one year and reaches no further than the area in which the franchisee operated. A clause that does not meet those conditions is void.
Mandatory law for franchisees established in the Netherlands
The rules of the Dutch Franchise Act apply to every franchisee established in the Netherlands. You cannot depart from them to the franchisee’s detriment, not even by choosing a foreign law to govern the agreement (Article 7:922 of the Dutch Civil Code). An Italian or Danish fashion brand with Dutch franchisees is therefore just as bound by them.
A lawyer to draft or review your franchise agreement
A franchise formula often starts with one entrepreneur asking if they can copy your shop. That is exactly when the contract gets thrown together in a hurry. At Liaise we draft franchise agreements for fashion, design and retail brands that comply with the Dutch Franchise Act, and put together the information you give a candidate in advance. If you are the franchisee, we go through the draft and the figures with you during the four weeks you have for that. Secure your trade mark, trade name and house style before the first franchise store opens; more on that under trade mark law.
Setting up a franchise formula, or is there a franchise agreement on the table? Get in touch or call 020 675 88 21.
