Extension under “the then applicable conditions”
Many franchise agreements contain a franchise renewal clause that allows the franchisee to re-exercise the franchise for another five years, provided that the franchise agreement is accepted “on the terms then in force”.
Does this somewhat cryptic formulation constitute a license for a franchisor to unilaterally change the conditions, i.e. the content of the new franchise agreement, when the contract extension is up for discussion? By no means. It has been established in case law that a franchisor is certainly not free to freely change the conditions in the new franchise agreement in accordance with its own insight and policy in the event of a contract renewal. For example, if a higher fee is suddenly requested, this means that the option granted can in practice only be invoked under such additional conditions that this is more than the franchisee could expect. The conduct of the franchisor in question described here may then be unlawful.
Does this mean that a franchisor cannot change his franchise agreement at all in the event of a contract renewal if the above option is included in the franchise agreement? Not that either. The franchisor can indeed change and add to various subjects in the franchise agreement. However, it is important to reach consensus in advance with the existing franchisees, for example in consultation with the franchise council. In this way, surprises in the event of a contract extension for existing franchisees are eliminated in advance and a clear situation is created long before any contract extension that benefits everyone.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Franchise ordered to compensate franchisor for lost fee income.
A recent ruling focused on the question of whether the ...
Article Franchise+: “Is the franchisor bound by the statutes of the franchisees’ association?” – mr. M. Munnik – dated November 11, 2021
Within a franchise organization it is not uncommon for franchisees ...
Article The National Franchise Guide: “Humps in the standstill period” – mr. T. Meijer – dated October 19, 2021
The Franchise Act has been seen by a large number ...
Unilateral changes to opening hours are prohibited from 1 January 2022
On July 14, 2021, a legislative amendment to the shopping ...
Litigation as a franchisees association.
The Eye Wish Opticiens franchisees have recently filed opposition to ...
Between the franchisor’s diagnosis and forecasting duty
In the leading legal scientific journal WPNR, Mr. Dolphijn a ...