Corona justifies halving the franchise fee – mr. RCWL Albers – dated February 1, 2022
In a recent ruling by the Amsterdam Court of Appeal, the court reversed a cessation of the franchisee’s exploitation ordered by a court in preliminary relief proceedings.
The court considered it justified by an appeal to unforeseen circumstances that the franchisee had paid less franchise fee during lockdowns. A legal basis that has been frequently used in recent years by tenants to (successfully) negotiate rent discounts.
Although an appeal to unforeseen circumstances (Section 6:258 of the Dutch Civil Code) is not exclusively reserved for parties to a lease, litigation has mainly taken place in the context of lease agreements in recent years.
In line with this jurisprudence, the court considers in this ruling on the franchise agreement that:
“The possibility of the outbreak of a crisis of this magnitude was not foreseen or (apparently) intended by the parties in the franchise agreement. It is incorrect to allow the consequences of this to be unilaterally for the account and risk of Amstel (the franchisee), a division of that risk (on a 50/50 basis) for the months in which the Julianaplein location had to be closed in whole or in part due to corona measures imposed by the government is more obvious.”[1]
This reasoning of the court is understandable in itself, but it is not clear from the ruling how this relates to the fact that the franchise fee depends on turnover. In this case, the franchise fee was 4% of turnover. A logical consequence of (partial) lockdowns is of course that turnover is falling and that already for this reason less franchise fee is paid. Unlike with (most) rental agreements, there is no monthly fixed contribution in this case.
In my view, this aspect has wrongly not been included in the considerations of the Court of Appeal and in doing so, the Court of Appeal seems (perhaps unintentionally) to introduce a rule of law that makes it possible for franchisees (in the sectors affected by corona) to set their turnover-dependent franchise fee for the leave half unpaid or even claim it back.
[1] See ECLI:NL:GHAMS:2021:16, paragraph 3.10.
Ludwig & Van Dam lawyers, franchise legal advice.
Do you want to respond? Then email to albers@ludwigvandam.nl
![232court-min](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/232court-min.jpg)
Other messages
Violation of duty of care affects exoneration
In a dispute about an appeal to an exoneration clause in the franchise agreement by the franchisor, it was considered that the nature of the franchise agreement should be taken into account
Supermarket letter – 5
Acquisition of a supermarket location by terminating the lease at the expense of the sitting tenant is allowed by the Supreme Court.
Acquisition of a supermarket location by terminating the lease at the expense of the sitting tenant is allowed by the Supreme Court
On 25 April 2014, the Supreme Court confirmed for the second time that the waiting period of three years for termination of the rental agreement for retail space due to urgent personal use after the purchase of the property
Unauthorized unilateral collective fee increase by the franchisor
In an important decision of the Amsterdam Court of Appeal of 23 April 2014, the question was whether a franchisor was allowed to implement an increase in a contribution.
Interests Association of Franchisees of the Netherlands (BVFN) is in further consultation with the Minister
On April 16, 2014, the previously announced meeting between the Belangen Vereniging Franchisenemers Nederland (BVFN) and the Ministry of Economic Affairs took place.
Exoneration of duty of care with the franchisor’s prognosis
In a judgment of the Overijssel court of 9 April 2014, the interesting question arose whether a collaboration should be qualified as a franchise.