As of March 1, 2025 new changes to the pre-contractual information document (PID)!
Are you active in the distribution sector, sales concessions, franchising,...? If so, you may be familiar - e.g. as a franchisor - with the obligation to provide a draft agreement and a pre-contractual information document (‘PID’) to the other contracting party (e.g. the franchisee) at least one month before the conclusion of the commercial agreement.
In a recent article we already informed you that the information to be mentioned in the PID has thoroughly changed since September 1, 2024.
However, soon you will have to update your PID again! This is because the information you must mention in the PID will be further expanded. These new rules will come into force on March 1, 2025.
New disclosure requirements in part 2 of the PID
The PID consists of two parts. In Part 1, the ‘person granting the right’ (e.g. the franchisor) must provide information on ‘important contractual provisions’. In Part 2, ‘data for the correct assessment of the commercial cooperation agreement’ must be communicated. These data include: the outlook of the network's market share, the number of commercial cooperation agreements concluded in the last three years, the intellectual property rights whose use is authorised,...
Earlier this year, Part 1 of the PID was substantially amended. These amendments came into force on September 1, 2024. You can read about what exactly was amended here.
However, the legislature is now announcing additions in relation to Part 2 of the PID.
Take into account changes to Part 2 of the pre-contractual information document (‘data for the correct assessment of the commercial cooperation agreement’), to avoid invoking the nullity of the agreement.
Overview of the new disclosure requirements
In Part 2 of the PID, you will soon also have to provide the following information::
- the expansion plans of the person granting the right in the trading area;
- the applications for an operating licence or an establishment licence submitted with the competent authorities for wholly or partly competing outlets in the trading area;
- if it is common practice within the network to make investments on a regular basis: the information on these investments, including an estimate of the amounts to be invested;
- an estimated operating account over a minimum period of three years (based on the model included as an Annex to the Royal Decree ), so that the person receiving the right (e.g. the franchisee) can prepare his own operating account.
Feel free to contact us for any further explanation of these new provisions.
The new obligations apply to new commercial cooperation agreements concluded from March 1, 2025, but also to amendments and renewals of current agreements as of that date.
Entry into force and sanctions
You must include the new information not only in the PID in the context of new commercial cooperation agreements you enter into from March 1, 2025, but also in the simplified PID in the context of amendments and renewals of current agreements from that date.
If the PID does not contain the new disclosure requirements, or these details are incomplete or inaccurate, the ‘person acquiring the right’ (e.g. the franchisee), can invoke the nullity of the relevant contractual provisions or of the entire agreement.
Summary:
- The information you must disclose in the pre-contractual information document has once again been extended.
- The new obligations apply to new commercial cooperation agreements concluded from March 1, 2025, but also to amendments and renewals of current agreements as of that date.
- You should therefore update the pre-contractual information document again.