Franchisees: do not conclude arbitration clauses, but do take out legal expenses insurance
In conflicts between franchisor and franchisee, it often happens that the parties do not fight with equal arms. This may be due, among other things, to the fact that the franchise agreement contains an arbitration clause. Arbitrators must be paid for by the parties. The costs of such a procedure can therefore turn out to be extremely high. In practice, this more than once means that the franchisee is unable to litigate against the franchisor, who is generally better able to finance arbitrators. Consequence: the franchisee has no possibility to start arbitration proceedings or sometimes even to defend himself. Arbitral clauses in franchise agreements therefore entail legal inequality. There is then no question of equality of arms, one of the basic principles in a civilized constitutional state.
In addition, it is more than once problematic for a franchisee to obtain legal assistance when this is indicated. If the franchisee needs to hire a lawyer, it is not always easy to pay this service provider. This problem can be overcome if the franchisee insures himself of legal assistance when entering into the franchise agreement by taking out legal assistance insurance. This prevents the franchisee from being unable to obtain adequate legal assistance on financial grounds.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Ludwig & Van Dam attorneys summon Sandd and PostNL on behalf of the Sandd franchisees – dated 9 January 2020 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) has today summoned Sandd and PostNL before the court in Arnhem. The VFS believes that Sandd and PostNL are letting the franchisees down hard.
Article The National Franchise Guide: “Why joint and several liability, for example, next to private?” – dated 7 January 2020 – mr. AW Dolphin
Franchisees are often asked to co-sign the franchise agreement in addition to their franchise, for example. Sometimes franchisees refuse to do so and the franchise agreement is not signed.
Ludwig & Van Dam Advocaten assists Sandd franchisees: Franchisees Sandd challenge postal monopoly in court – dated 12 November 2019 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) is challenging the decision of State Secretary Mona Keijzer to approve the postal merger between PostNL and Sandd before the court in Rotterdam.
Franchisee trapped by non-compete clause? – dated October 21, 2019 – mr. AW Dolphin
The District Court of East Brabant has ruled that a franchisee was still bound by the non-competition clause in the event of premature termination of the franchise agreement.
Supermarket letter – 26
Supermarket Newsletter No. 26
Link franchise agreement and rental agreement uncertain? – dated October 14, 2019 – mr K. Bastiaans
It is no exception within a franchise relationship that the parties agree that the franchise agreement and the rental agreement are inextricably linked.