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
Post non-compete clause
Post non-compete clause
Franchise & Law source of information 2015 no. 2 – A chronicle of franchise law over the first half of 2015 – mr. AW Dolphin
Franchise & Law source of information 2015 no. 2 - A chronicle of franchise law over the first half of 2015
Subdistrict court approval of the link between franchise and rental agreement remains necessary
A frequently recurring subject of litigation in matters between franchisors and franchisees
The set-off defense and the termination of the franchise agreement for an indefinite period
On 29 September 2015, the Arnhem-Leeuwarden Court of Appeal ruled on whether the franchisor could terminate the franchise agreement for an indefinite period.
Dutch Franchise Code bad for the franchise industry
Dutch Franchise Code bad for the franchise industry
Bruna in serious collision with many franchisees
Bruna in serious collision with many franchisees