Franchisor liable for errors made by a franchisee? – mr. AW Dolphijn – dated November 23, 2020
A franchise organization of mortgage brokers requested the court to declare that the franchisor is not liable for the fact that a franchisee has committed a serious error, or at least committed fraud with a customer. The District Court of Amsterdam ruled in this case on November 4, 2020, ECLI:NL:RBAMS:2020:5408.
Mortgage brokers are supervised by the AFM and require a licence. The franchisor is the central license holder in this matter and has a collective license (Section 2:105 Wft). The individual franchisees then act under the responsibility of the franchisor. However, the franchisor stated that this does not mean that the franchisor is then in all cases liable for errors made by the franchisee.
The court rules that the franchisor can be liable, in addition to the franchisee, for an error on the part of the franchisee if that error is caused by the affiliated company not complying with the aforementioned licensing obligations and requirements. For example, if a franchisee does not comply with the licensing requirements and third parties suffer damage as a result, this can lead to liability of the franchisor towards that third party.
In this case, the franchisor’s claim to establish that the franchisor was not liable was formulated too broadly.
This ruling provides more guidance on the extent to which a franchisor under a collective license could be liable for errors and fraud by franchisees.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl
Other messages
Article The National Franchise Guide – “Corona discount of 50% on the rent” – mr. AW Dolphijn – dated September 15, 2020
Disappointing turnover due to the corona crisis may mean that the rent is halved, even if the rent is partly turnover-related.
Article Franchise+ – “Franchisor uses “derivative formula” (without his knowledge)” – mr. AW Dolphijn – dated September 9, 2020
Many franchisors will not be aware of the fact that they use a "derived formula" as referred to in the Franchise Act.
Article Franchise+ – “Obligations and rights of the starting franchisee” – mr. AW Dolphijn – dd
What should you pay attention to as a starting franchisee, what are your obligations and what are your rights when concluding the franchise agreement?
Article Mr. C. Damen – Three conditions for the right to customer compensation for the agent upon termination of the agency agreement – dated August 26, 2020
In the agency relationship between an agent and a client (the principal), the parties record their cooperation agreements in an agency agreement. When the principal enters into the agency agreement
Article Mr. C. Damen – “When does the obligation to provide proof apply for the submission of the franchise agreement?” dated August 17, 2020
Does the obligation to produce information apply to showing a (franchise) agreement in proceedings if the parties to the proceedings do not have a legal relationship to the (franchise) agreement?
Article Mr. AW Dolphijn – “How do you value a franchise company with a discharge loan?” – dated August 14, 2020
A discharge loan is a proven means of franchisors to find long-term franchisees.