From manager to franchisee
It regularly happens that branch managers are invited to franchise the branch where they work. This offers opportunities, but can also entail all kinds of unforeseen risks due to the transition.
Labor law first and foremost requires that the employment contract be terminated in a careful manner. According to case law, the employer/prospective franchisor must carefully investigate whether the company manager is sufficiently informed and actually wants to give up his protection under employment law and social insurance law. It is recommended that this voluntary choice and the process leading up to it also be recorded in writing. It is also important to take plenty of time for this. In addition, self-employment should not be anticipated before all agreements have been signed.
The (additional) due care to be observed is partly due to the fact that the employee is generally in a dependent position vis-à-vis the employer/franchisor. If this process is not supervised with sufficient care, there is a risk that the termination of the employment contract may subsequently be regarded as invalid due to the lack of a will aimed at actual self-employment and/or abuse of circumstances. The employee must therefore not be lightly “tempted” into self-employment.
Also, after the choice for self-employment, something actually needs to change in the relationship. In the event of such a transition, it will have to be critically examined whether the tax authorities and the UWV have indeed started to regard the former employee as a self-employed person. To this end, it is important that the case is submitted to the aforementioned authorities in advance and that a VAR statement (WUO) is requested in good time.
Particular attention is also required when providing, or withholding, any forecasts. In some cases, forecasts are omitted on the assumption that the manager is well informed. However, that need not always be the case. After all, the question arises whether the manager has had insight into cost structures in a franchise relationship. It is therefore recommended to state explicitly why forecasts are not made. By acting in this way, the requirement of informed consent, which should be the basis for termination of the employment contract, will also be met more quickly.
This can lay the foundation for a successful franchise relationship, which will be experienced as a promotion.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Partial indebtedness of entrance fees due to lack of turnover and non-delivery of contractual performance by the franchisor
The franchisee rightly invokes unforeseen circumstances due to the lack of turnover and successfully claims moderation of the entrance fee due.
Termination of the franchise agreement does not automatically lead to termination of the sublease agreement
Franchisor terminated the franchise agreement with the franchisee. The franchise agreement stipulated that termination of the franchise agreement would also terminate the sublease agreement
Despite the franchisee’s counterclaim, the franchisor justified dissolution of the franchise contract
The Rotterdam court recently ruled that payment arrears of more than € 80,000 is sufficient for the franchisor to dissolve the franchise agreement.
Actually using a building, but without a lease
In franchising, it often happens that the business premises from which the franchisee operates his business
Switching franchisee from one franchise organization to another is not without risks
The court in Amsterdam recently ruled in a case where a franchisee switched from one franchisor to another, in the same industry.
Franchisor: protect your brand(s) well
As a franchisor, you have developed a franchise formula that distinguishes itself, among other things