Control and guidance
Situations regularly occur in practice in which a franchisee, as it is so nicely called, ceases to pay franchise fee, supplies and sometimes even rent to his franchisor for reasons of his own. This can take the form of simply no longer paying invoices within the terms set for this, but also by carrying out so-called reversals in the case of automatic payment arrangements.
Of course, a franchisee may have good reasons to make a payment a little later. Furthermore, there may of course be good reasons not to make a payment, for example if a delivery has not been delivered or has been delivered incorrectly. The franchisee concerned must inform the franchisor in writing in that case or in good time and announce that he is suspending his payment, stating the reasons for this. However, non-payment can also be a strong warning signal, especially when it takes on structural forms.
Franchisees sometimes use the tool of non-payment as an expression of dissatisfaction with the formula. This can also be an indication of business difficulties. Whatever the reason, it is generally important to continuously monitor the payment behavior of franchisees and, if problems arise, to take action at the earliest possible stage. In practice, it often happens that franchisees see their franchisor as a true bank and then fulfill all their financial obligations, except those to the franchisor. An unsolvable situation then arises which ultimately, especially when the franchise agreement is terminated, leads to substantial depreciation on the part of the franchisor. After all, it is difficult to pluck from a bald chicken. The higher the debts rise, the more difficult that situation will be to rectify later on.
The advice is therefore, once again, to keep a close eye on the payment behavior of franchisees and to act immediately if irregularities occur.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Clarity regarding financial obligations of franchisees
Franchisees generally have various long-term financial obligations towards the franchisor.
The possibilities regarding claiming a rent reduction then
Following on from earlier published articles of my hand, I will once again deal with a tenancy law issue below.
Catering agreements
The Netherlands Competition Authority (NMa) recently made a decision regarding the beer supply agreements submitted by Heineken for exemption.
European Code of Honor on Franchising
Article 3 of the European Code of Honor on Franchising deals with this in quite some detail
A proven success formula?
In these times of malaise and tentative recovery, it is of course also grating and hinged in the franchise world.
The duty of care of the franchisor is further specified in the context of the
In recent years, a large amount of jurisprudence has come to light regarding the non-achievement of the forecasts by the franchisee.