Can a franchisee leave sales channels unused?
Franchise formulas are now generally well equipped with an online sales channel. The expansion with an online sales channel sometimes caused friction with the franchisee. However, developments continue. What if a franchisee of a formula, who traditionally worked with physical stores, only operates the formula through the online sales channel?
In that context, the judgment of the preliminary relief judge of the District Court of Amsterdam of 4 November 2015, ECLI:NL:RBAMS:2015:8040 (IBG/Accell), is important.
In addition to physical stores, the franchisee also operated a web shop (underfietsenwinkel.nl). After a year, the dealer sells the stores and continues its web shop. This is not what the franchisor had in mind. It focused on an omni channel formula. The franchisor requires that the necessary optimal service can be offered to customers within the framework of the franchise formula, and that would really only be possible with a physical store as well.
The franchisor wished to terminate the cooperation immediately on the grounds of non-performance, or at least terminate the cooperation after the agreed notice period had expired. The court ruled that there was no breach of contract, because it had not been explicitly agreed that a physical store should be present. It was agreed that the franchisee would provide the necessary service. The franchisee does that too, but doesn’t do it from a store. This is because service is provided at home. Immediate termination of the cooperation was therefore rejected. According to the court, the franchisor was authorized to terminate the cooperation with the franchisee, subject to the agreed notice period.
To avoid ambiguity and disputes, the dealer or franchise agreements should not only contain agreements on the expansion of sales channels, but also on the limitation of sales channels.
mr. AW Dolphijn – Franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice.
Do you want to respond? Go to dolphijn@ludwigvandam.nl
Other messages
Does a franchisee have to accept a new model franchise agreement?
On 31 March 2017, the District Court of Rotterdam, ECLI:NL:RBROT:2017:2457, ruled in interlocutory proceedings on the question whether franchisor Bram Ladage had complied with the franchise agreement with its franchisee.
Mandatory (market-based) purchase prices for franchisees
To what extent can a franchisor change agreements about the (market) purchase prices of the goods that the franchisees are obliged to purchase?
Director’s liability of a franchisee after failing to rely on an unsound prognosis.
On 11 July 2017, the Court of Appeal of 's-Hertogenbosch made a decision on whether the franchisor could successfully sue the director of a BV for non-compliance with the
Liability accountant for prepared prognosis?
In a judgment of the Court of Appeal of 's-Hertogenbosch of 11 July 2017, ECLI:NL:GHSHE:2017:3153, it was discussed that franchisees accused the franchisor's accountant of being liable
How far does the bank’s duty of care extend?
Some time ago the question was raised in case law what the position of the bank is in the triangular relationship franchisor – bank – franchisee.
Burden of proof reversal in forecasting as misleading advertising?
In an interlocutory judgment of 15 June 2017, the District Court of Zeeland-West-Brabant, ECLI:NL:RBZWB:2017:3833, ruled on a claim for (among other things) suspension of the non-compete clause.