Formula change not justified – dated October 23, 2018 – mr. AW Dolphin
On 12 October 2018, ECLI:NL:RBNHO:2018:8884, the preliminary relief judge of the District Court of Noord-Holland ruled again on the issue in which Intertoys wishes to convert Bart Smit’s stores into Intertoys stores, within the exclusive catchment area of an Intertoys franchisee. See here for the discussion of the comparable judgments of 30 January 2017 and 24 March 2017. The central issue in the franchise agreement is the exclusive service area of an existing Intertoys franchisee and the franchisor’s prohibition to allow other Intertoys branches within it. In the opinion of the preliminary relief judge, this also includes the prohibition on converting a Bart Smit store located within it into an Intertoys store.
The preliminary relief judge considers it conceivable that reasonableness and fairness in a franchise relationship entail that a franchisee must comply with a decision by the franchisor to change the franchise formula as at issue here. According to Intertoys, this is all the more pressing because the vast majority of franchisees recognize the importance and necessity of the actions of Intertoys and Bart Smit and support them. Also the franchisees who operate in an overlap area. Intertoys has achieved a tailor-made solution with almost every one of them. Of the 23, 5 have not yet been arranged or laid down in writing.
However, according to the preliminary relief judge, the obligation of a franchisee to comply with a decision by the franchisor to change the franchise formula requires at least that the outcome is a properly organized and conducted collective process of consultation and consultation by the franchisor. decision-making by/with all involved franchisees. The preliminary relief judge is of the opinion that the process followed in this case does not meet these conditions. This is because Intertoys has opted to achieve tailor-made solutions in bilateral negotiations with each individual franchisee. Under those circumstances, Intertoys may require that the franchisee in question also arrives at reasonable solutions through negotiations. However, Intertoys cannot deny the entitlements under the franchise agreement, certainly not as long as it has not been established that the franchisees have not acted reasonably in the negotiations.
A franchisor’s wish to amend the franchise agreement will by no means always succeed. I wrote about this in Contracting magazine, which article can also be downloaded.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice.
Do you want to respond? Go to dolphijn@ludwigvandam.nl
![228intertoys-min](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/228intertoys-min.jpg)
Other messages
Agency: some outlines
In practice, questions are asked with some regularity regarding the legal nature
Rental price change
Following on from earlier published articles of my hand, I will once again deal with a tenancy law issue below.
Franchise Fees
An extremely important subject for both the franchisee and the franchisor that is invariably included in the franchise agreement concerns the franchise fees, often referred to as the term
Insured and well
Occasionally, a franchise agreement contains a clause that obliges the franchisee to take out legal expenses insurance.
Rayon protection II: limitation of the exclusive area.
As a follow-up to the contribution in the previous Newsletter, this time the (possibilities of) curtailment of the exclusive franchise area will be discussed. In most franchise agreements
Franchise Agreements and Terms and Conditions
Franchise agreements often include concise arrangements with regard to delivery and payment conditions.