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
Franchise Act passed by the House of Representatives – dated 16 June 2020 – mr. AW Dolphin
The Franchise Act was adopted by the House of Representatives on 16 June 2020.
Sandd franchisees find satisfaction in nullifying Sandd and PostNL merger – dated 12 June 2020
The franchisees of mail delivery company Sandd went to court in November, assisted by Ludwig & Van Dam Advocaten. Court of Rotterdam rules on takeover by PostNL.
Plenary debate dated June 9, 2020 in the Lower House of the Franchise Act – dated June 10, 2020 – mr. AW Dolphin
On 9 June 2020, the legislative proposal for the Franchise Act was discussed in plenary in the House of Representatives. An amendment and a motion have been tabled.
Franchising is “a bottleneck in tackling healthcare fraud” – dated 10 June 2020 – mr. AW Dolphin
According to the various supervisory authorities in the healthcare sector, franchise constructions can be seen as a non-transparent business construction in which the supervision of professional and
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.