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
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.