During the Belgian Franchise Expo (March 2006), franchise industry representatives addressed the Belgian Minister of the 'Classes Moyennes' (small and medium sized enterprises) Sabine Laruelle, with regard to the adoption in Belgium of a law on pre-contractual disclosure information aimed at commercial networks of independent entrepreneurs. The law (in force since 1st February, 2006) is referred to as the 'Loi Laruelle' and, although not specific to franchising, includes it in its scope of application. This column is extracted from Pierre Jeanmart's speech to Sabine Laruelle.

When the Belgian Franchise Federation (BFF) and its franchisor members decided to become members of the European Franchise Federation 15 years ago, they committed themselves in full knowledge to the respect of the principles of the European Code of Ethics for Franchising which is a code of good business practice, and which defines the balance that must prevail in the respective rights and obligations between parties to a franchise relationship. The European Code is remarkable in that when court judges need clarification on the spirit that must prevail over franchisor-franchisee issues they refer to this Code, which has existed since 1972.

After France adopted its Loi Doubin instituting the legal obligation for (PID) in 1989, the Belgian Franchise Federation has, of its own initiative, instituted its own PID which it rendered compulsory for all of its franchisor members.

This explains why the BFF was ready to collaborate with the Ministry's services when this government decided to legislate on pre-contractual information disclosure, and to wisely restrict itself to pre-contractual information only, thus consciously choosing not to intervene in the freedom of the parties to contract.

The BFF, which represents the networks of franchises operating in Belgium, franchisors and franchisees alike, intends now to take a step further in the direction of the legislator's wish, by adopting a Quality Chart which will set out to define authentic and ethical franchising.

Why, you will ask me, impose yet further obligations on franchisors? The answer is: this is certainly not to torment them further, but invite them to commit themselves yet more to the necessary quality, balance and dialogue with their franchisee partners.

Thus, will we have demonstrated that further more restrictive legislation affecting the franchise contract itself will not be necessary, as this would only impact negatively on the development of franchising, a form of distribution which has proved itself in terms of creation of enterprises, of employment and of added value.

In this regard, and knowing that franchising represents only a third of the 'partnership networks' in Belgium, I wish to attract the attention of our commercial colleagues to conform as quickly as they can to the new law. In this respect, I would like to inform you that the BFF holds itself ready to help other trade associations by sharing its experience in this matter so as to together demystify any problems that the application of this law may bring forth. Thus, altogether, we might show that the entire sector of commercial partnerships is responsive to the expectations of the legislator.

What does this Quality Chart for Franchising state? Without going into detail, let me say that by conforming to it on a voluntary basis, its signatories commit themselves to effectively put into practice authentic and ethical franchising. In terms of authenticity, its criteria include the following:
• the idea that the commercial concept of the brand must have been tested;
• the right to the use of the licences of the brand's assets;
• the quality of the franchisor's know how;
• continued assistance to the franchisees;
• the development of the network;
• a commitment to its longevity;
• the recognition of the franchisee's investments;
• and the respective fees to each party.

In terms of ethics, the criteria imply the respect of the European Code of Ethics for franchising - and therefore the provision of pre-contractual disclosure - but also:
• the manner in which to draw up the franchise contract;
• the regular and structured dialogue with the network of franchisees;
• the equitable nature of the mutual relations;
• the loyal resolution of conflicts;
• and clarity in the means of determining the franchisor's fees, whatever form they take.

Since this moment is given to clarity, let me say that the respect of such a Chart should pose no problem to a franchise brand of quality. This is the message that the European and Belgian Franchise Federations address to those who practice commercial partnerships in general, and to those who practice franchising in particular.

Pierre Jeanmart is the Chairman of the European Franchise Federation, Honorary Chairman of the Belgian Franchise Federation and is co-founder of IXINA International.
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For more reaction to the the 'Loi Laruelle', read the Belgium Brief.