District protection no protection against termination due to urgent own use – dated September 17, 2019 – mr. AW Dolphin
On 10 September 2019, the Court of Appeal of The Hague, ECLI:NL:GHDHA:2019:2341, made a decision in the matter between Bram Ladage as franchisor and one of its franchisees. The question to the was in order, is whether the franchisor as lessor can execute the lease terminate due to urgent own use, while this own use, in the sentence of district protection, would be excluded under the franchise agreement.
The franchisor had terminated that lease due to urgent personal use, among other things because it wished to operate the business space itself again as a snack bar and that it would receive a profit from that exploitation. can achieve a better return than renting to the franchisee. The franchisor had drawn up an operating budget for this purpose. The court considers that, insofar as the franchisee would be entitled to a goodwill compensation (within the meaning of Article 7:308 of the Dutch Civil Code) at the end of the exploitation, the difference between the net profit of its own exploitation by the franchisor on the one hand and the rental income for the franchisor on the other, is so great that it is still plausible that a higher return can be achieved by the franchisor with its own operation.
The franchisee pointed out that in the franchise agreement was agreed that the franchisee has the exclusive entitled to use the Bram Ladage system in the business premises. According to the franchisee, this means that the franchisor as lessor has the cannot cancel the rent due to urgent own use, because this is exactly what own use with the territory protection in the franchise agreement is excluded. The after all, the franchise agreement will continue until 1 January 2023. Judged however, it is ruled by the court that the duration of the franchise agreement is not is relevant, as the franchise agreement does not entitle the continuation of the lease of the business space.
In this case, the term of a franchise agreement therefore offers no guarantee for the premature termination of the rental agreement by the franchisor on the grounds of urgent personal use, even if district exclusivity has been agreed in the franchise agreement.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice.
Do you want to respond? Go to dolphijn@ludwigvandam.nl
![240verbod](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/240verbod.jpg)
Other messages
Franchising is serious business
Franchise practice is characterized by a wide variety of issues that manifest themselves in it.
Price maintenance: always void?
The Court of Appeal in The Hague ruled some time ago that influencing the price level at which the franchisee sells the products to the consumer can be susceptible to competition law.
Another franchisor against will and thanks?
For various reasons, franchisors and franchisees are confronted with the (desire to) transfer of rights
Compensation for insufficient duty of care by the franchisor
Compensation for insufficient duty of care by the franchisor
The Bankrupt Franchisor: A Sequel
Some contributions back wrote my office mate mr. J. Strong what is necessary about the situation when a franchisor goes bankrupt
How far does the non-competition clause extend?
The Supreme Court recently issued a judgment regarding a non-competition clause in a franchise relationship.