Introduction
The Dutch Franchise Act entered into force on 1 January 2021. As mandatory law, it has applied to all franchise relationships involving franchisees established in the Netherlands since that date. While new franchise agreements and renewal agreements were required to comply immediately, a two-year transitional period applied to franchise agreements already in force at the time of introduction. That transitional period expired on 1 January 2023.
As of that date, all existing franchise agreements must fully comply with the mandatory provisions of the Act. The period leading up to 1 January 2023 was therefore characterized by extensive contract reviews, negotiations and implementation processes within franchise systems. Looking back from 2026, it is possible to draw several conclusions about how these obligations have been implemented and how they function in practice.
Contractual adjustments under the Franchise Act
The contractual adjustments required under the Franchise Act concerned three core areas.
First, franchise agreements must include a provision addressing goodwill. Where goodwill is reasonably attributable to the franchisee and the franchise location is continued after termination, the agreement must specify how such goodwill will be taken into account. The Act does not prescribe a specific valuation method, leaving room for contractual solutions, but it does require that the issue be expressly addressed.
Second, the Act introduced consent rights for franchisees with respect to certain decisions by the franchisor, particularly where proposed changes to the franchise formula may have significant financial consequences for franchisees. Franchise systems were expected to define threshold values in advance, above which consent is required, either individually or through a representative body if agreed.
Third, post-contractual non-compete clauses had to be brought into line with the statutory limits. Such clauses are only valid if they are limited to one year after termination, confined to the territory in which the franchisee operated, and relate to goods or services competing with those covered by the franchise agreement.
By 1 January 2023, franchise agreements that did not comply with these requirements risked partial nullity or unenforceability of the relevant provisions.
Implementation processes in practice
The process of amending existing franchise agreements proved to be complex in many franchise systems. The Act requires consultation with franchisees, and the statutory obligation for both parties to behave as a “good franchisor” and a “good franchisee” applies throughout the implementation process.
In the years 2021–2023, many franchisors engaged in structured consultation with franchisee councils or representative bodies. In practice, these processes were not always straightforward. Negotiations were sometimes perceived as compulsory rather than voluntary, and discussions on goodwill arrangements, consent thresholds and non-compete clauses frequently touched on sensitive commercial and strategic issues.
In many systems, however, agreements were ultimately reached that balanced the statutory requirements with operational feasibility. Where parties were willing to invest time, exchange information transparently and adopt reasonable positions, the implementation process generally resulted in workable amendments that were accepted across the network.
In other systems, negotiations stalled or became adversarial. By the end of the transitional period, some franchise organizations had not yet reached agreement on all required amendments. From a 2026 perspective, it is clear that unresolved implementation issues have continued to surface in subsequent years, particularly in discussions on formula changes, investments and exit scenarios.
Sanctions and legal consequences after 1 January 2023
Since the expiry of the transitional period, the legal consequences of non-compliance have become more concrete.
Where post-contractual non-compete clauses do not meet the statutory requirements, they are null and void and cannot be relied upon. This has practical implications for franchisors seeking to protect their formula after termination and underscores the importance of carefully drafted, compliant clauses.
Where no agreement has been reached on goodwill arrangements or consent mechanisms, the franchise agreement does not comply with mandatory law on those points. Provisions deviating from the Act are void. In practice, this means that franchisees may challenge decisions, seek suspension of proposed changes, or claim that statutory mechanisms apply by default.
If no thresholds for consent were agreed by 1 January 2023, the statutory fallback mechanism applies. In that situation, individual franchisee consent is required for each proposed change to the franchise formula that has financial consequences, regardless of the magnitude of the impact. From an operational perspective, this can significantly reduce commercial flexibility and slow down innovation within franchise systems.
The general obligation for both franchisor and franchisee to behave properly continues to play an important role. This includes an obligation to act reasonably and constructively in negotiations on outstanding issues. In practice, this has led parties to revisit stalled implementation discussions even after the formal deadline, sometimes with the assistance of mediators or external advisors.
Developments since 2023
By 2026, most franchise systems operating in the Netherlands have formally completed the implementation of the Franchise Act in their documentation. Compliance with the Act has become part of standard franchise governance, and international franchisors entering the Dutch market increasingly adapt their franchise models at an early stage to reflect Dutch mandatory law.
At the same time, the Act has clearly altered the dynamics within franchise relationships. Franchisees are more aware of their statutory rights, particularly with respect to information, consultation and consent. Franchisors, in turn, are more cautious in introducing changes to the formula without early engagement with franchisees.
The statutory evaluation of the Franchise Act, announced at the time of its adoption, is expected to inform future policy discussions. As of early 2026, no comprehensive legislative amendments have been adopted, but the Act is widely regarded as having shifted the balance toward greater transparency and structured dialogue within franchise systems.
Conclusion
The 1 January 2023 deadline marked the end of the formal transition period for the Dutch Franchise Act, but not the end of its practical impact. In the years since, the Act has become a central reference point in the governance of franchise relationships in the Netherlands.
Franchise organisations that invested in careful implementation and constructive consultation have generally been able to integrate the Act into their operations without major disruption. Where implementation was delayed or incomplete, the statutory regime has continued to shape negotiations and decision-making. The key lesson is that compliance with the Dutch Franchise Act is not merely a contractual exercise, but an ongoing process that requires attention to transparency, reasonableness and cooperation throughout the franchise relationship.
Article published by Leeway (The Netherlands)
