Customers, clientele and exceptions thereto
Some franchise constructions have the characteristic that the products or services in question are only supplied to certain consumers. Is this allowed?
If a prohibition is imposed on all franchisees by the franchisor to restrict sales to certain end-users, this is permissible only if there is an objective justification linked to the product. For example, this could be a general ban on the sale of hazardous substances to certain customers or for safety or health reasons. Only then is such a ban allowed.
The situation is different when others than end users (consumers like you and me) are excluded. Consider, for example, a franchise formula in which the franchisees are assigned an exclusive clientele whereby the franchisees are not allowed to supply wholesalers. Only to end users may be delivered. In principle, such an arrangement is possible. However, so-called passive sales should remain possible. This means responding to spontaneous requests from individual customers. This may be the case, for example, as a result of general advertising and promotion in the media and on the Internet that reaches customers within exclusive customer groups of other franchisees. If the potential customer then wants to go to a franchisee in another exclusive area, this is possible at any time.
The franchisor and franchisee are advised to clearly record such situations in advance in the franchise agreement, so that no misunderstandings or undesirable situations can arise. For the record, it should be pointed out that what is described here is mandatory law, from which it is absolutely not allowed to deviate. If this does take place, this can form grounds for nullity of the franchise agreement. Other measures, for example by the Netherlands Competition Authority (NMa), are also possible. Mr Th.R. Ludwig
For information: Theodoor Ludwig or Derk van Dam
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Ludwig & Van Dam attorneys summon Sandd and PostNL on behalf of the Sandd franchisees – dated 9 January 2020 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) has today summoned Sandd and PostNL before the court in Arnhem. The VFS believes that Sandd and PostNL are letting the franchisees down hard.
Article The National Franchise Guide: “Why joint and several liability, for example, next to private?” – dated 7 January 2020 – mr. AW Dolphin
Franchisees are often asked to co-sign the franchise agreement in addition to their franchise, for example. Sometimes franchisees refuse to do so and the franchise agreement is not signed.
Ludwig & Van Dam Advocaten assists Sandd franchisees: Franchisees Sandd challenge postal monopoly in court – dated 12 November 2019 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) is challenging the decision of State Secretary Mona Keijzer to approve the postal merger between PostNL and Sandd before the court in Rotterdam.
Franchisee trapped by non-compete clause? – dated October 21, 2019 – mr. AW Dolphin
The District Court of East Brabant has ruled that a franchisee was still bound by the non-competition clause in the event of premature termination of the franchise agreement.
Supermarket letter – 26
Supermarket Newsletter No. 26
Link franchise agreement and rental agreement uncertain? – dated October 14, 2019 – mr K. Bastiaans
It is no exception within a franchise relationship that the parties agree that the franchise agreement and the rental agreement are inextricably linked.