C1000 loses appeal for inspection of C1000 deal

On May 12, 2015, the Court of Appeal in Den Bosch ( ECLI:NL:GHSHE:2015:1668 ) ruled on whether the Association C1000 should provide access to documents about the agreements that Jumbo and Ahold have made about the C1000 franchisees.

On 23 September 2014, the preliminary relief judge of the District Court of East Brabant ( ECLI:NL:RBOBR:2014:5484 ) had already rejected the claim of Vereniging C1000. The preliminary relief judge then ruled that the weighing of interests was made in favor of Jumbo. In a I already indicated in an earlier publication that the outcome is understandable, because the commercial agreements between Jumbo and Ahold, among others, do not have to affect the legal position of the C1000 franchisees. At the time I pointed out the possibility for the Association to bring the claim from the perspective of intellectual property rights. The C1000 franchisees have a license under the franchise agreement to use the intellectual rights of the C1000 brand. In this way it could be claimed what agreements have been made between Jumbo and, for example, Ahold about the fate of the licensees (or the C1000 franchisees) upon transfer of the location to Ahold. After all, in that case the weighing of interests (in Article 843a paragraph 4 DCCP) would not play a role, or at least much less (pursuant to Article 1019a paragraph 3 DCCP).

The C1000 Association has appealed to the Court of Appeal. The Court of Appeal emphasizes that Vereniging C1000 must demonstrate that it has a legitimate interest in inspecting the documents at Jumbo. It is not sufficient if there is interest in the documents, so that the (former) C1000 franchisees can determine their legal position. It does not appear from the published judgment that the claim was initiated from the perspective of intellectual property rights, so that the weighing of interests (of Article 843a paragraph 4 Rv) applies in full.

The Court of Appeal ruled that the agreements regarding the transfer of the property and the rental rights from C1000 to, for example, Ahold, in principle leave the lease agreement with the C1000 franchisee intact. However, the rental agreements stipulate that the rented property can only be used for the operation of the C1000 formula. The relationship between the lease and franchise agreement is therefore broken.

The Court of Appeal takes the breaking of this connection into account in its judgment. The Court of Appeal considers that it may be important for an individual C1000 franchisee to know whether, based on the agreements between Jumbo and Ahold, on the basis of the agreements between Jumbo and Ahold, if the connection between the lease and the franchise agreement is broken, it would not also be possible to transfer to the Jumbo formula or another formula. It therefore concerns a situation in which a C1000 franchisee has not yet reached agreements with Ahold about concluding a franchise agreement to operate the Albert Heijn formula, while the C1000 franchisee does rent the retail space from Ahold. The Court of Appeal therefore, just like the preliminary relief judge, does not seem to be blind to the interests of some franchisees who are pushed in a certain direction.

The majority of the C1000 franchisees have now reached agreements on a subsequent formula, so that the question of whether a different formula can also be chosen is no longer so great. There is no (any longer) sufficient legitimate interest of Vereniging C1000 to have access to the agreements with Ahold, according to the Court of Appeal. Moreover, the Association C1000 has not sufficiently made it plausible that agreements have indeed been made between Jumbo and Ahold about the switch of C1000; franchisees to a formula other than Albert Heijn’s formula. These assertions have not been substantiated by the Association C1000, neither with explanations nor with a specification of which agreements are involved in concrete terms. The court therefore ignores this.

The Court of Appeal informs Vereniging C10000 that its claims are only well founded [heeft]; on baseless guesses&; , hypothetical approximations; perhaps in the hope that something can be gained for the franchisees from Jumbo, C1000 BV or Ahold or for the individual franchisees in the negotiations with Ahold  . It is therefore concluded that there is a fishing expedition of the Association C1000 and the appeal is rejected and the judgment of the preliminary relief judge is upheld.

Mr AW Dolphijn – Franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice.

Do you want to respond? Mail to dolphijn@ludwigvandam.nl