Franchise
A franchise is an agreement whereby the franchisee is granted the right to use the franchisor’s trademark, business formula and know-how in exchange for payment of a fee.
In a franchise arrangement, the franchisee operates its own business in accordance with the franchisor’s proven concept. The franchisor provides support, training and, frequently, products or services, while the franchisee continues to act as an independent entrepreneur.
This framework is relevant because the Dutch Franchise Act has, since 2020, imposed specific obligations, including a pre-contractual duty of disclosure and rules governing the term and termination of the agreement. These measures protect the franchisee against unfair terms.
In practice, franchising is widespread in retail, hospitality and the service industries. Lawyers review contracts for statutory compliance and advise on disputes relating to royalties, non-compete covenants or termination.
“The entrepreneur entered into a franchise agreement to open an outlet under the brand of the national chain.”
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