Franchisor fails by invoking a non-compete clause
Although a non-compete clause is validly formulated in a franchise agreement, a situation may arise that is so diffuse that the franchisor cannot invoke it. See the judgment of the Arnhem-Leeuwarden Court of Appeal of 10 October 2017, ECLI:NL:GHARL:2017:8777.
The Court of Appeal shares the view of the preliminary relief judge who previously ruled that the franchisor could not invoke the non-compete clause. This was because the leased retail property had to make way for housing and the franchisor had terminated the franchise agreement per canceled on January 1, 2012. In anticipation of new business premises to be rented from the franchisor, the franchisee (temporarily) operated a business under his own name. It was uncertain whether the franchisor would still be able to offer (suitable) business premises to continue the collaboration.
If, upon termination of a franchise agreement, a franchisor leaves open whether the post-non-compete clause applies, this ambiguity can under certain circumstances be held against the franchisor.
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
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.
Article Franchise+ – Franchisees enjoy the same protection as employees and commercial agents with regard to a non-competition clause – dated 7 May 2020 – mr. RCWL Albers
It often happens that, especially by franchisees, the validity of a post-contractual non-compete clause is considered too lightly.
The support agreement for the Retail sector in this Corona crisis – dated 15 April 2020 – mr. K. Bastian
On April 10, 2020, the Ministry of Economic Affairs, together with a number of landlords, retailers and banks, reached a support agreement.
Court rules that corona crisis does not constitute force majeure – dated April 10, 2020 – mr. AW Dolphin
If payment cannot be made due to a decrease in income, then there is not always a force majeure situation.
Important information for directors of franchisees associations: Online meetings and decision-making in times of corona – dated April 10, 2020 – mr. J. Strong
Emergency law provisions for legally valid decisions without physically meeting within the association structure.