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Franchise Agreement
I need a franchise agreement for a new franchisee in Belgium, detailing the rights and obligations of both parties, including a 5-year term, initial franchise fee, ongoing royalty payments, and compliance with brand standards. The agreement should also cover territorial exclusivity, training support, and termination conditions.
What is a Franchise Agreement?
A Franchise Agreement creates a legal partnership where a successful business (the franchisor) lets another party (the franchisee) use its brand name, business model, and know-how in exchange for fees and a share of profits. Under Belgian law, these contracts must follow strict disclosure rules set by the Code of Economic Law, especially regarding pre-contractual information.
The agreement spells out everyone's rights and obligations, from using trademarks and following quality standards to paying royalties and respecting territorial limits. It protects both sides by clearly defining training requirements, operational procedures, and termination conditions - making it essential for Belgian franchising networks in sectors like retail, food service, and hospitality.
When should you use a Franchise Agreement?
Use a Franchise Agreement when expanding your successful business model through partners while maintaining control over your brand and operations. This contract becomes essential before letting others operate under your name in Belgium, especially in retail, hospitality, or service industries where consistent quality matters.
The timing is crucial - you need this agreement in place before any franchise operations begin, and after completing the mandatory 30-day disclosure period required by Belgian law. It protects your intellectual property, sets clear performance standards, and establishes revenue sharing terms. Many Belgian businesses use franchise agreements to expand across regions without the capital investment of opening their own locations.
What are the different types of Franchise Agreement?
- Franchise License Agreement: Basic format focused on trademark and intellectual property rights, common for small retail operations
- Franchise Contract Agreement: Comprehensive version covering all operational aspects, suited for established chains
- Franchise Development Agreement: For multi-unit developers planning to open several locations in a specific territory
- Franchisor Franchisee Agreement: Standard single-unit format with detailed quality control provisions
- Franchise Broker Agreement: Specialized version for intermediaries who connect franchisors with potential franchisees
Who should typically use a Franchise Agreement?
- Franchisors: Belgian businesses with proven business models who want to expand through partners while maintaining brand control and quality standards
- Franchisees: Entrepreneurs or companies investing in an established brand, following the franchisor's system and paying fees for the right to operate
- Legal Counsel: Specialist franchise lawyers who draft and review agreements to ensure compliance with Belgian disclosure requirements
- Business Consultants: Advisors helping evaluate franchise opportunities and negotiate terms
- Trade Associations: Organizations like the Belgian Franchise Federation providing guidance and standard practices
How do you write a Franchise Agreement?
- Business Details: Gather complete information about your brand, operational procedures, and trade secrets that will be shared
- Territory Planning: Define exact geographical boundaries and any exclusive rights for the franchise location
- Financial Terms: Calculate initial fees, ongoing royalties, and marketing contributions based on market research
- Compliance Check: Review Belgian pre-contractual disclosure requirements and prepare documentation 30 days ahead
- Quality Standards: Document specific operational requirements, training programs, and performance metrics
- Draft Generation: Use our platform to create a legally-sound agreement that includes all mandatory elements under Belgian law
What should be included in a Franchise Agreement?
- Identification Details: Full legal names and addresses of franchisor and franchisee, plus registration numbers
- Rights Grant: Clear scope of intellectual property usage, territorial limits, and exclusivity terms
- Financial Terms: Initial fees, recurring royalties, marketing contributions, and payment schedules
- Operational Standards: Detailed quality requirements, training obligations, and compliance procedures
- Duration and Renewal: Contract term, renewal conditions, and termination rights per Belgian law
- Pre-contractual Information: Confirmation of mandatory 30-day disclosure compliance
- Dispute Reֱ: Belgian jurisdiction clause and mediation procedures
What's the difference between a Franchise Agreement and a Contractor Agreement?
A Franchise Agreement differs significantly from a Contractor Agreement in several key ways, though both involve business relationships. While a Franchise Agreement creates a long-term partnership allowing brand and business model use, a Contractor Agreement establishes a temporary working relationship for specific services.
- Control and Independence: Franchisees must follow strict operational guidelines and brand standards, while contractors maintain significant autonomy in how they complete their work
- Duration and Commitment: Franchise Agreements typically last 5-10 years with renewal options, whereas Contractor Agreements often cover specific projects or shorter timeframes
- Brand Usage: Franchisees gain rights to use the franchisor's brand and systems; contractors cannot represent themselves as part of the hiring company
- Payment Structure: Franchises involve initial fees plus ongoing royalties, while contractors usually receive project-based or hourly compensation
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