Laws & regulations

Franchise Act

As of 1 January 2021, specific legislation in the field of franchising has been in force in the Netherlands, namely the Franchise Act. The Franchise Act is contained in articles 911 - 922 of Book 7 of the Dutch Civil Code (BW). The Franchise Act focuses on four elements of the franchise relationship, the aim being to create a greater balance in the relationship between the franchisor and the franchisee.

These elements are:

  1. the (pre-contractual) exchange of information;
  2. the interim amendment of an existing franchise agreement;
  3. the consultations between the franchisor and its franchisees;
  4. the termination of the franchise relationship.

 

Read more about a number of the subjects regulated by the Franchise Act here.

 

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The European Code of Ethics for Franchising

The European Code of Ethics for Franchising contains rules of conduct that may be applied by franchisors and franchisees in their relationship. The aim of the code is to achieve a certain uniformity within Europe in the field of franchising. The code contains various obligations for the franchisor and the franchisee.

The code is not a law, but a voluntary form of self-regulation and is endorsed by all the members of the European Franchise Federation ("EFF"), including the Dutch Franchise Association ("NFV"). Franchisors who are members of the NFV must comply with the code.

The code was last updated in 2016. The European Code of Ethics for Franchising can be found below.

 

 

Dutch Franchise Code

The Dutch Franchise Code ("NFC") contains self-regulatory rules of conduct which must be observed by franchisors and franchisees in the conclusion, performance and termination of a franchise agreement. The NFC is applicable only, if such has been agreed.

The NFC was drafted in the period 2015-2016 by a committee of representatives of franchisors and franchisees. The purpose of the NFC was to create a more level playing field within the franchise sector. However, the code of conduct was received critically by the franchise sector and was hardly applied in practice.

In 2017, an attempt was made to enshrine the NFC in law. After many reactions had been received from the sector, in which franchisees were mainly positive and franchisors were mainly critical, it was decided to adopt a different course. The intention to enshrine the NFC in law was replaced by the intention to introduce specific legislation on franchising.

Despite the fact that in practice the NFC has not been applied a great deal and has meanwhile been superseded by formal legislation, the provisions and accompanying explanations may still be interesting.

You can download the Dutch Franchise Code via the button.

 

Alternative Franchise Code

The Association for Distribution, Franchise and Agency Law (the "Association DFA") has approximately 165 members, consisting of legal advisers, company lawyers and attorneys-at-law, who are among other things specialised in franchising.

The Association DFA has witnessed the industry struggling with the consultation version of the Dutch Franchise Code ("NFC"). It observes that there is insufficient support among the franchisors for this present NFC. Obviously, in order for a franchise code of conduct to be successful, it is essential that it is supported by all those concerned. The Association DFA furthermore takes the view that the present NFC is too extensive, unbalanced and that it interferes too much with the parties’ contractual freedom. Within that context the DFA Association has decided, since one of its objectives under the articles of association is to promote the quality of legal practice in the field of, inter alia, franchising in a national and international context, to ask a delegation of its members to develop an alternative franchise code, which meets the aforementioned objections.

Download the Alternative Franchise Code below.

 

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