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
Relocation of franchisees
For various reasons, it may be necessary for a franchisee during the term of his franchise agreement
Linking rental agreement and franchise agreement: new legislation
The new tenancy law is expected to come into force in a few months' time.
Obligations of the lessor to remedy defects in the rented property
A franchise agreement is often closely linked to a rental agreement.
The right of the franchisor to sell its franchise organization to a
Following on from the previously published article in this series on the right of a franchisor
Catering agreements / Beer supply agreements II
An article about catering agreements was recently published in this series of articles.
Exclusive purchase obligations.
In a judgment of the Amsterdam Court of Appeal dated 31 October 2002, which judgment was rendered in response to an appeal lodged against an earlier summary judgment