Column Franchise+ – “Disputes about franchise fees”
Lately, it has also hit the biggest franchise organizations in the Netherlands. For example, at the formulas of Albert Heijn, Hema, Etos, Bruna and Olympia, considerable litigation was and is still being done between the franchisor and the franchisees. The point is always that the franchisees believe they have no or insufficient insight into the structure of the calculated franchise fee.
At Albert Heijn, the dispute is about whether the franchisor should not deduct disguised purchase bonuses from the fees owed. After the franchisees have been ruled against by the court, the case is now on appeal to the Court of Appeal.
At Hema, the franchisor and the franchisees are unable to reach an agreement on a fee for e-commerce services. To this end, the franchisor has collected amounts of which the franchisees claim that this does not do justice to the situation. The court ruled that for the time being, Hema may not set off the fee it charges for e-commerce services against the credit balances of franchisees.
The franchisees of the Etos formula rightly argued that they paid a fee to the franchisor for the exclusive use of the collectively specific Etos products. The franchisor also wanted to offer these Etos products outside the Etos stores. Although the franchisor eventually gave in, it subsequently merely renamed these products. The court ruled that with the franchisor’s commitment to phase out these comparable products, the likelihood of confusion among the public could not be determined for the time being.
At Bruna, a reduction in the fee was offered in exchange for more hard franchising. This met with some resistance because of, among other things, the lack of transparency. At an individual level, the necessary disputes have been and are being fought out in court.
The franchisees of the Olympia franchise formula had successfully argued in court that the franchisor was using a covert way to earn additional income from the franchisees’ business. It has been established in court that there was an impermissible hidden fee. The franchisor of the Happy Nurse formula has also been sentenced in the same way.
The above things must stop. Clarity in advance is the key to this and underlines the importance of making clear agreements in advance about exactly what the fee should be paid for and how that fee should be calculated exactly. The franchisor will also have to offer the necessary transparency in this regard. That way, you can prevent quarrels about the franchise fee in the future.
mr. AW Dolphin – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
The (in)validity of a post-contractual non-competition clause in a franchise agreement: analogy with employment law?
On 5 September 2017, the District Court of Gelderland, ECLI:NL:RBGEL:2017:4565, rendered a judgment on, among other things, the question of whether Bruna, as a franchisor, could invoke the prohibition for a
Column Franchise+ – mr. J Sterk: “Court orders fast food chain to extend franchise agreement
The case is set to begin this year. For years, the franchisee has been refusing to sign the new franchise agreement that was offered with renewal, as it would lead to a deterioration of his legal position
Not a valid non-compete clause for franchisee
On 18 November 2016, the interim relief judge of the Central Netherlands District Court, ECLI:NL:RBMNE:2016:7754, rendered a judgment in the issue concerning whether the franchisee was held
Franchise & Law No. 5 – Acquisition Fraud and Franchising Act
The Acquisition Fraud Act came into effect on 1 July 2016. This includes amendments to Section 6:194 of the Dutch Civil Code.
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?