Step-by-Step Plan: Due Diligence & Setup Blog Series
Blog II of III
1. The PID: Pre-Contractual Information Document
Dutch law requires franchisors to give prospective franchisees a PID (Pre-contractual Information Document) at least four weeks before signing.
Your PID needs to include:
- A copy of the draft franchise agreement
- Financial projections and cost assumptions
- Contact info for current and past Dutch franchisees
- A full fee breakdown initial, recurring, and marketing
- Details on intellectual property use
- Terms for exit, renewal, and goodwill compensation
This four-week “cooling off” period gives candidates time to review and ask questions without pressure. Changing key terms during this time, or skipping the PID entirely, can invalidate your agreement and damage your brand.
2. Legal Entity and Tax Setup
Most foreign brands go with one of two options:
- Dutch BV (Besloten Vennootschap): A private limited company—ideal for master franchises or area developers
- Branch Office: Less common, better suited to brands operating directly
You’ll also need:
- VAT (BTW) registration
- A Dutch bank account for local transactions
- Registration with the Chamber of Commerce (KvK)
Pro tip: Work with a local accountant familiar with franchise cash flow and multi-unit models. It’ll save time and stress.
3. Be Transparent About Fees
Dutch franchisees expect more than numbers—they want to understand what they’re paying for.
Be clear about:
- What the initial fee covers (training, setup, launch)
- How ongoing fees are calculated (fixed, revenue-based, etc.)
- Where marketing contributions go (shared brand fund or local use)
Vague or bloated fees raise red flags. Lay out the value you’re offering, and be ready to explain every line item
4. Protect Your IP and Stay EU-Compliant
Register your trademarks with the EUIPO—not just in your home country.
Make sure your franchise setup complies with:
- GDPR (for data and marketing practices)
- EU competition law (especially around exclusive territories and supplier terms)
A strong operations manual helps enforce brand standards while keeping you compliant.
5. Don’t Skip Local Legal Review
Even if your home-country legal team is top-notch, Dutch law is a different playing field.
Hire a Dutch franchise lawyer to:
- Review and adapt your contract
- Validate your PID
- Flag anything that might turn off Dutch partners
It’s cheaper to do it right upfront than to fix it later.
Quick Setup Checklist
- PID prepared and delivered
- Dutch BV or entity registered
- EUIPO trademarks filed
- Fee structure clearly explained
- GDPR and EU laws followed
- Local legal and financial experts consulted
Final Thought: Trust Starts With Preparation
In the Dutch franchise world, how you prepare says everything about how you’ll operate. Brands that take legal and financial setup seriously earn trust—and that trust becomes a major advantage.
Next in the series:
“The Franchise Fit Checklist: Are You Ready for the Dutch Market?”
You can also read Blog I:
How to Structure a Franchise Agreement That Works in the
Netherlands
You can also read Blog III:
The Franchise Fit Checklist: Are You Ready for the
Dutch Market?
