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
Malpractice as a means of pressure: not a good idea
The starting point when entering into a franchise relationship is, of course, that the relationship benefits both the franchisor and the franchisor
Changing regulations and cooperation conditions of the Franchise Council
Most franchise organizations have a franchise council.
Entrepreneur and debt restructuring
In practice, it happens that franchisees, and sometimes also franchisors, because of the crisis
Will the real competent judge please stand up!
Franchising, especially hard franchising, is increasingly a mixed legal relationship.
The early termination of the franchise agreement
Recently, on August 27, 2008, a court in preliminary relief proceedings ruled, among other things
Franchising in a BV
Franchisees are also increasingly setting up private limited companies.