Distribution & Franchising

Franchising is a form of distribution that is increasingly being chosen by companies. Franchising combines independent entrepreneurship for the franchisees with an opportunity to connect with and make use of a total concept devised and developed by the franchisor. There are currently about 800 franchise formulas in the Netherlands, and this number is continuing to rise, particularly in the (business) service sector.

Uniformity in the formula is essential. The formula ensures recognizability for the consumer or customer and offers the possibility of achieving scale benefits through joint purchasing, advertising, automation, etc.

Since the introduction of the Franchise Act on 1 January 2021, franchising is subject to a specific legal framework. This means that franchising is subject to various mandatory provisions which may not be deviated from to the detriment of the franchisees. Furthermore, the franchise relationship contains elements of various agreements, such as purchase, license, rent and forms of financing. In addition, competition law plays an important role in the franchise relationship.

CMS has a well-established national and international franchise practice within its organization, with extensive experience in drafting franchise agreements, amending franchise agreements and supervising the start and changes within franchise organizations. CMS also mediates and litigates on a regular basis in disputes between franchisor and franchisee.

If you have any questions about a franchise relationship, please contact CMS.