Continuation of operation, despite substantial backlog of franchise fee?
Can the franchisee continue to operate despite a significant franchise fee payment arrears? On 29 April 2014, the District Court of Rotterdam (ECLI:NL:RBROT:2014:4701) ruled on this question in preliminary relief proceedings.
As a franchisor, IPIC rents out an IMO car wash to a franchisee for operation. The franchisee has left more than a ton of franchise fee due unpaid. After notice of default, IPIC dissolves the franchise agreement extrajudicially, replaces the locks to the car wash and renders the car wash unusable for the franchisee.
The franchisee claims in preliminary relief proceedings to have the car wash freely available again. As a counterclaim, the franchisor claims – inter alia – insofar as required, to oblige the franchisee to vacate the leased property and to keep it vacated.
The preliminary relief judge rules that, now that the franchise agreement can (partly) be qualified as the lease of business space, the franchisor cannot dissolve the lease agreement extrajudicially. Only the court can dissolve a commercial space lease (Article 7:231 paragraph 1 DCC). The court awards the claim to make the car wash available again to the franchisee. In that context, the franchisor’s counterclaim for eviction of the leased property is also rejected.
The legal qualification of a franchise agreement sometimes remains difficult if there is also the use of immovable property. If the use of the immovable property can be qualified as a business space and there is some form of compensation for this, then the legal protection rules for the benefit of the tenant of a business space will very quickly prevail. An important protective rule is that the tenant cannot prematurely terminate the lease for a business space without the court or without the cooperation of the tenant. A preliminary legal analysis of the franchise agreement and the relevant circumstances can help to prevent uncertainties.
Mr AW Dolphijn – Franchise lawyer
Ludwig & Van Dam Franchise attorneys,franchise legal advice. Do you want to respond? Mail to dolphijn@ludwigvandam.nl
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Supermarket Newsletter – No. 34 –
ACM PUBLISHES COOP/PLUS MERGER DECISION In the supermarket newsletter of ...
Entitlement to goodwill compensation for franchisee established – mr. AW Dolphijn – dated December 30, 2021
On December 22, 2021, the District Court of Rotterdam ruled ...
Operating contribution payable by the franchisor – mr. AW Dolphijn – dated December 27, 2021
Sometimes a franchisor makes a financial contribution to a franchisee ...
ACM imposes conditions on merger Coop/Plus – mr. J. Sterk – December 23, 2021
Today, ACM announced that it would approve the merger under ...
Supermarket Newsletter – No. 33 –
Today, ACM announced that it would approve the merger under ...
Article Franchise+: “The pitfalls of the standstill period” – mr. RCWL Albers – Dec 22, 2021
With the arrival of the Wet franchise this year, a ...