European Code of Honor on Franchising
Article 3 of the European Code of Honor on Franchising deals quite extensively with, in short, the obligations a franchisor has with regard to the information he provides to aspiring franchisees. This includes the way in which a franchisor publishes (this must be unambiguous and not misleading) and provides information, including financial information, about the franchise organization. However, the provision of information also includes the provision of the franchise agreement, a handbook, any (sub) rental agreement, as well as the provision of forecasts.
An entirely different aspect that is important in the recruitment and selection of franchisees and that can also be found in Article 3 of the European Code of Honor is the pre-agreement and its content. The main reason for a franchisor to enter into a pre-agreement with an aspiring franchisee is often the non-disclosure agreement that forms an important part of the pre-agreement.
Article 4 of the European Code of Honor on Franchising states, roughly translated, that it is an “obligation” of the franchisor to select its franchisees in an adequate manner. This includes, for example, education, personal qualities and whether or not you have sufficient financial resources that are necessary to operate the future company. The latter is not only important for the franchisee himself, but also very important for the franchise organization to which the franchisee wants to join. After all, building and maintaining a financially sound franchise organization will often largely depend on the financial situation of the individual franchisees. In that sense, when new franchisees join the organization, it is also an obligation of a franchisor towards the group of existing franchisees to ascertain well in advance about the financial (im)possibilities of the prospective franchisee. In some cases, it could even be the case that a franchisor does not properly fulfill its obligations towards the existing group of franchisees if it admits someone to the organization of whom it knows in advance or could have suspected that it has insufficient financial resources. to make his franchise business a success. After all, the franchisor pretends to have a successful formula, often with national coverage. Well, if it happens regularly within a franchise organization that, for example, a franchisee has to close his company unintentionally after he has been affiliated with the organization for only a year, this will not only have negative consequences for the name recognition of the franchise organization, but also this can lead to unrest and grumbling among the existing group of franchisees.
As can be seen from the above, it is therefore recommended that, as a franchisor, you ensure that you comply with the provisions of the European Code of Ethics on Franchising and furthermore ensure that a new franchisee is given the European Code of Ethics on Franchising. is handed down.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Franchise Act passed by the House of Representatives – dated 16 June 2020 – mr. AW Dolphin
The Franchise Act was adopted by the House of Representatives on 16 June 2020.
Sandd franchisees find satisfaction in nullifying Sandd and PostNL merger – dated 12 June 2020
The franchisees of mail delivery company Sandd went to court in November, assisted by Ludwig & Van Dam Advocaten. Court of Rotterdam rules on takeover by PostNL.
Plenary debate dated June 9, 2020 in the Lower House of the Franchise Act – dated June 10, 2020 – mr. AW Dolphin
On 9 June 2020, the legislative proposal for the Franchise Act was discussed in plenary in the House of Representatives. An amendment and a motion have been tabled.
Franchising is “a bottleneck in tackling healthcare fraud” – dated 10 June 2020 – mr. AW Dolphin
According to the various supervisory authorities in the healthcare sector, franchise constructions can be seen as a non-transparent business construction in which the supervision of professional and
Article Franchiseplus: “Franchisors participate in franchisees” – dated June 3, 2020 – mr. AW Dolphin
Franchisors are increasingly participating in the franchisee's business. There are several benefits for both the franchisee and the franchisor.
Article The National Franchise Guide – “Corona discount on rent” – dated June 2, 2020 – mr. AW Dolphin
If a rental property is obliged to be closed due to corona, there may be a right to a rent reduction, according to the Northern Netherlands court.