Entitlement to goodwill compensation for franchisee established – mr. AW Dolphijn – dated December 30, 2021
On December 22, 2021, the District Court of Rotterdam ruled for the first time, as far as is known, that a franchisee is entitled to a goodwill compensation, as referred to in the Franchise Act. The ruling has not (yet) been published.
The Franchise Act stipulates that under certain circumstances a franchisee may be entitled to compensation for goodwill. See Article 7:920 paragraph 1 of the Dutch Civil Code. Although the Franchise Act stipulates that the franchise agreement must contain a goodwill arrangement no later than 1 January 2023, the court ruled that this already applies in the relevant case.
The franchise agreement regarding a service formula had ended after the agreed term had expired. The customer base belonged to the franchisee. However, just before the end of the franchise agreement, the franchisor had informed the franchisee’s customers that the services provided by the franchisor would be continued, that the franchisee’s staff would be taken over and that the entire service would therefore remain unchanged. The former franchisee was not compensated at all by the franchisor. The court deems this contrary to law. An expert will have to determine the size of the goodwill value, for which the franchisor must advance the costs of the expert’s report.
Ludwig & Van Dam lawyers, franchise legal advice.
Do you want to respond? Then email to dolphijn@ludwigvandam.nl
![232court-min](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/232court-min.jpg)
Other messages
Franchising as urgent personal use
In a judgment dated 18 November 2014, the Court of Appeal in Den Bosch considered, among other things, whether a lessor may terminate the lease of business premises due to urgent personal use.
Can exclusion of error in forecasting benefit the franchisor?
Franchisors are often accused of failing before and when concluding a franchise agreement
Mistake about prognosis, annulment of non-compete clause?
Mistake about prognosis, annulment of non-compete clause?
Chapter in book NFV about import and export of franchise formulas, written by mr. Th.R. Ludwig
Chapter in book NFV about import and export of franchise formulas, written by mr. Th.R. Ludwig
PVV motions to improve the position of franchisees
PVV motions to improve the position of franchisees
Changes at Albert Heijn’s hard franchise formula
Changes at Albert Heijn's 'hard franchise' formula