Acquisition of inventory and goods
Many franchise agreements, particularly where retail situations are concerned, contain one or more clauses regarding the return and/or takeover of goods and inventory upon termination of the franchise agreement. These clauses often turn out to be quite different in nature. Some terms assume a completely non-binding position on the part of the franchisor, both with regard to the possibility of taking back goods and/or inventory, and with regard to the determination of prices with regard to goods and/or inventory. Other stipulations are based on a mandatory return, linked to market prices for goods and inventory. There are also clauses obliging the franchisor to take back goods and inventory at market prices for the goods, less obsolete stock and the value of the inventory less relevant depreciation. The latter stipulations are most closely related to the franchisee’s generally existing financial obligations towards the bank in practice. The franchisor is then involved in this in relation to the relevant financing arrangement and then agrees on such an arrangement in accordance with such arrangement. This arrangement does not necessarily have to be included in the franchise agreement, but can also be arranged by the parties in underlying financing agreements. However, it is not uncommon for such an obligation to be included in the franchise agreement. After all, it concerns an important obligation of the franchisor and franchisee towards each other.
Franchisor and franchisee would be wise to realize in advance what a possible buy-back arrangement means in practice. In this way, it is prevented that any open-ended arrangements can arise that prove to be insufficiently safeguarding the interests of either the franchisor, the franchisee, or both at the time of invocation.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Franchise Act passed by the House of Representatives – dated 16 June 2020 – mr. AW Dolphin
The Franchise Act was adopted by the House of Representatives on 16 June 2020.
Sandd franchisees find satisfaction in nullifying Sandd and PostNL merger – dated 12 June 2020
The franchisees of mail delivery company Sandd went to court in November, assisted by Ludwig & Van Dam Advocaten. Court of Rotterdam rules on takeover by PostNL.
Plenary debate dated June 9, 2020 in the Lower House of the Franchise Act – dated June 10, 2020 – mr. AW Dolphin
On 9 June 2020, the legislative proposal for the Franchise Act was discussed in plenary in the House of Representatives. An amendment and a motion have been tabled.
Franchising is “a bottleneck in tackling healthcare fraud” – dated 10 June 2020 – mr. AW Dolphin
According to the various supervisory authorities in the healthcare sector, franchise constructions can be seen as a non-transparent business construction in which the supervision of professional and
Article Franchiseplus: “Franchisors participate in franchisees” – dated June 3, 2020 – mr. AW Dolphin
Franchisors are increasingly participating in the franchisee's business. There are several benefits for both the franchisee and the franchisor.
Article The National Franchise Guide – “Corona discount on rent” – dated June 2, 2020 – mr. AW Dolphin
If a rental property is obliged to be closed due to corona, there may be a right to a rent reduction, according to the Northern Netherlands court.