Amsterdam Court of Appeal restricts franchisor’s appeal to non-competition – dated July 6, 2020 – mr. T. Meijer
The Amsterdam Court of Appeal ruled on June 30, 20202 that a
franchisor has no (unlimited) recourse to a contractual agreement
competition prohibition. A franchisor who reasonably does not
has an interest in invoking a non-competition clause, a former
franchisee for violation of such prohibition.
In this matter, a franchise agreement has been established between a
former pediatric nurse and a children’s home care formula. At the time
of the signing of the agreement there was another
franchisee is active, but this is soon afterwards out of the formula
stepped. From that moment on, the franchisor has served the Northern Netherlands
from its own branch and the franchisee has South Netherlands as
her work area. Since the franchisee because of her
qualities has grown very fast, her company is even bigger
than that of its franchisor. Of a vertical proportion
due to the size and layout of the formula at any given time according to it
court no longer. Parties are at the end of the
contractual term entered into consultation with each other about the cooperation
otherwise and to continue working together on an equal footing.
The parties have not been able to reach agreement on this. On behalf of the
the franchisor has been informed by its lawyer that the franchise agreement
would be tacitly renewed and that the former franchisee kept
would be to continue paying the franchisor fee. If not already
case, the franchisor has summoned the franchisee to do so
use of the franchisor’s trade name and is an appeal
made on the contractual prohibition of competition, which meant that the
franchisee for a period of one year
children’s home care organization should strike.
At first instance, the court held that between the parties
indeed a non-competition would be in force, which the
(former) franchisee would have violated. The franchisee is
liable for damages to be demonstrated by the franchisor
as a result of the violation of this prohibition. On appeal it has
However, the Amsterdam Court of Appeal listened to the arguments of the
former franchisee and the franchisor’s claims in full
turned down. The Court of Appeal followed the franchisee’s argument
that the franchisor has not taken any steps to operate
enter into the territory of the franchisee, let alone that they
demonstrated that a new franchisee would be placed here.
In fact, there was no evidence at all for the existence of one
franchise organization.
The Court of Appeal is of the opinion that the franchisor was unable to do so
demonstrate that it has an interest in relying on the contractual
non-competition. For that reason, the Court of Appeal has the interest of the
former franchisee in continuing its business more heavily
weighed. It considers an appeal to a contractual non-competition clause under
those circumstances to the standards of reasonableness and fairness
unacceptable. The claims of the franchisor are therefore
completely rejected.
This judgment is in line with previous case law, in which it has been established
that invoking a contractual non-competition clause serves to protect the position
of a franchise formula. However, since here actually
there was no longer a franchise relationship and so did the franchisor
has not been able to demonstrate that there was an interest to be protected by law
the Court of Appeal has invoked the prohibition of competition in this matter
deemed unacceptable.
mr. T. Meijer – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Want
you respond? Go to meijer@ludwigvandam.nl
![232court-min](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/232court-min.jpg)
Other messages
Supermarket newsletter -28-
Supermarket newsletter -28-
Article Franchise+ – “Immediate information obligations of franchisors upon operation of the Franchise Act” – mr. AW Dolphijn – dated June 25, 2020
As soon as the Franchise Act enters into force, this will have an immediate effect on franchise agreements that already exist. The question is whether the information flows are set up optimally from a legal point of view.
Senate will adopt Franchise Act – dated 24 June 2020 – mr. AW Dolphin
The House of Representatives had unanimously adopted the proposal to introduce the Franchise Act on 16 June 2020
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.