Excusable infringement of territory exclusivity
The District Court of Rotterdam recently ruled on a matter concerning infringement of the agreed district exclusivity. The franchise agreement stipulated that the franchisee enjoyed the exclusive right to operate the formula within a radius of 15 kilometers from its location. In fact, however, several branches of the franchisor were located within a radius of 15 kilometers. Franchisee claimed to suffer damage as a result of this infringement. The franchisee requested an injunction in interlocutory proceedings subject to forfeiture of a penalty. The court rules that the alleged damage by the franchisee has not been substantiated or has not been sufficiently substantiated and that there is therefore no urgent interest in instituting such a claim in summary proceedings. The court also considers that the exclusivity was in fact not complied with and the franchisee was also aware of this. Moreover, the franchisee had failed to protest in time. The franchisee’s claims were rejected in full.
The foregoing means that franchisees cannot lightly invoke provisions in the franchise agreement without a well-founded interest if the parties actually act differently over a long period of time. In those cases, the exceeding of the standard may be excusable. For franchisors, it is therefore easier to enforce standards that are exceeded if the provisions are observed more strictly in practice and if the policy to this effect is clear. In particular, franchisees must protest in good time.
mr J. Sterk – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice Would you like to respond? Mail to info@ludwigvandam.nl
Other messages
Does a franchisee have to accept a new model franchise agreement?
On 31 March 2017, the District Court of Rotterdam, ECLI:NL:RBROT:2017:2457, ruled in interlocutory proceedings on the question whether franchisor Bram Ladage had complied with the franchise agreement with its franchisee.
Mandatory (market-based) purchase prices for franchisees
To what extent can a franchisor change agreements about the (market) purchase prices of the goods that the franchisees are obliged to purchase?
Director’s liability of a franchisee after failing to rely on an unsound prognosis.
On 11 July 2017, the Court of Appeal of 's-Hertogenbosch made a decision on whether the franchisor could successfully sue the director of a BV for non-compliance with the
Liability accountant for prepared prognosis?
In a judgment of the Court of Appeal of 's-Hertogenbosch of 11 July 2017, ECLI:NL:GHSHE:2017:3153, it was discussed that franchisees accused the franchisor's accountant of being liable
How far does the bank’s duty of care extend?
Some time ago the question was raised in case law what the position of the bank is in the triangular relationship franchisor – bank – franchisee.
Burden of proof reversal in forecasting as misleading advertising?
In an interlocutory judgment of 15 June 2017, the District Court of Zeeland-West-Brabant, ECLI:NL:RBZWB:2017:3833, ruled on a claim for (among other things) suspension of the non-compete clause.