In 2019, the Belgian B2B Act was adopted as part of the Code of Economic Law (the ‘Belgian B2B Act’). The Belgian B2B Act contains, inter alia, a number of unfair contractual clauses in order to protect companies from certain contractual imbalances between professional parties (Art. VI.91/1 and following Code of Economic Law), i.e.:

• a black list of per se prohibited clauses;
• a grey list of clauses presumed unfair unless proven otherwise;
• a catch-all prohibition of manifestly unfair clauses.

In accordance with the Belgian B2B Act, additional unfair clauses for specific sectors can be imposed. Considering that (supermarket) franchisees active in the food and beverage industry traditionally have a weaker bargaining power (due to the existence of 3 distributors that control the market and the increased use of the franchise model), the Royal Decree of 20 June 2024 has added the following unfair clauses for aforementioned franchises:

Black list:

1. refusing to compensate the franchisee or unduly restricting the franchisee’s right to obtain supplies from third parties if the franchisor fails to honor its duties regarding deliveries (e.g. non-timely deliveries, delivery of incorrect quantities, broad definitions of force majeure for non-compliant deliveries, delivery term as indicative term, liquidated damages clauses if the franchisee obtains supplies from third parties),
2. prohibit the franchisee from preparing or entering into negotiations to develop a new activity during the notice period or the term of a non-compete clause,
3. force the franchisee to bear more than 50% of the costs of promotional actions imposed by the franchisor,
4. confer exclusive jurisdiction on the court of the seat of the franchisor and/or a court in another linguistic region than that of the franchisee.

Grey list:

1. determine a manifestly unreasonable flat-rate valuation of the business or the shares of the franchisee (option or pre-emption right of the franchisor),
2. oblige the franchisee to operate at a loss for twelve months without providing a notice period of maximum four months, without additional compensation,
3. allow the franchisor to terminate the franchise with an express termination clause (e.g. termination within 48h when the franchisor made considerable long-term investments).

Unfair clauses will be declared null and void, but the supermarket franchise agreement will survive insofar as possible without the unfair clauses. As the new B2B rules have been developed in response to the widespread use of these (future) unfair practices, the Royal Decree will have a profound impact on the existing food retail sector.

These new B2B rules will enter into force on (i) 1 January 2025 for supermarket franchise agreements concluded, renewed or altered after this date and (ii) 1 May 2025 for all pre-existing supermarket franchise agreements.

It is worth mentioning that (supermarket) franchise agreements were already subject to precontractual information obligations, i.e. the mandatory exchange of the draft franchise agreement and a pre-contractual information document at least one month before entering into the agreement. Failure to exchange the aforementioned documents could enable the franchisee to claim the nullity of the franchise agreement up to two years after its conclusion.

Please do not hesitate to reach out to EY Law if you have any further questions regarding the mandatory B2B regime, commercial strategies for trade intermediaries or pre-contractual information obligations.

Action points

• Review mandatory pre-contractual information obligations for new supermarket franchise agreements
• Review new and existing supermarket franchise agreements to assess compliance with the new list of unfair clauses
• Assess whether the nullity of an unfair clause could have significant (financial) consequences

Read this newsflash also in French and Dutch.