Franchising and commercial lease: you can’t have one without the other?

Supreme Court ruling (12 Dec 2025): Resolutory link between franchise ↔ commercial lease under pressure in Wallonia
On 12 December 2025, the Belgian High Court(Hof van Cassatie, Cour de Cassation) issued a landmark decision fundamentally affecting the contractual practice of linking franchising and commercial lease agreements (where the franchisor is the main tenant and sublets to the franchisee) in Wallonia. This ruling confirms that the Walloon amendments to Art. 1, §§2–3 of the Commercial Lease Act—which stipulate (i) that commercial lease law also applies to rental agreements in commercial cooperation contracts (such as franchising) and (ii) that any clause exclusively linking a commercial lease to a specific brand is void—are mandatory and protect the tenant.

Context & Analysis:
The Walloon amendments to Art. 1, §§2–3 of the Commercial Lease Act are mandatory. The Court states that a clause causing the termination of the franchise to automatically affect the commercial lease between the same parties cannot undermine:

• The right of the franchisee to renewal (Art. 13) of the sublease
• The eviction indemnity (equal to three years’ rent) that the franchisee can claim if the franchisor refuses renewal without justification (Art. 16, IV). The end of the franchise agreement is therefore not a reason to refuse renewal of the (sub)lease.

Questions and critical note
In the case at hand, the franchise agreement also included a purchase option for the franchisor on the business of the franchisee, which would be exercised at the end of the franchise agreement. The question therefore arises as to the impact of this ruling on this purchase option. The renewal of the lease must be requested between 18 and 15 months before the expiry of the lease (and thus, in this case, likely also before the expiry of the franchise agreement if they have the same duration). Does this ruling mean that, once the franchise agreement has ended, exercising the purchase option does not automatically results in the (former) franchisee no longer having a lease, as it is sold together with the business? Probably not, so the practical impact of this procedure in this specific case appears to be limited. The franchisee in this case will lose his rights to the lease, but will receive a remuneration via the purchase price for his business.

Practical impact:

• Contract audit: Check clauses linking lease and franchise and ask yourself if the location of the franchise outlet is that important to you as a franchisor.
• Drafting: Ensure separate termination mechanisms in both agreements or other ways to link the duration of the (sub)lease to the franchise agreement or to acquire, as a franchisor, rights on the location of the franchise outlet (by way of a purchase option on the business of the franchisee?).
• Regional differentiation: Adapt contracts per region, as stricter rules apply only in Wallonia.

Conclusion:
This ruling is a wake-up call for all retail and franchise players. Contact our team for a thorough review of your contracts.