Goodwill Transfer: Include Google Business Profile?
What is transferred goodwill? This question can be very relevant in franchise relationships where goodwill is important (Section 7:921 of the Dutch Civil Code). Does Goodwill Transfer include a Google Business Profile? On 21 June 2022, the District Court of Rotterdam, ECLI:NL:RBROT:2022:5363, made an important ruling in that context.
The issue was that since the start in 2005, a nationwide franchise organization had been built up from one restaurant in Rotterdam. As a result, the brand name has gained enormous fame.
In 2018, a certain restaurant of that chain was sold. The buyer does not become a franchisee. The brand name of the restaurant is not transferred to the buyer and remains with the seller. The buyer has also started the rebranding and this will be completed in mid-April 2021.
A Google business profile has been created by the seller in the past for the restaurant. The brand name of the franchise chain is central to this. A Google company profile is a tool that companies can use to increase their online findability via Google.
Due to the restaurant rebranding, the restaurateur has changed the content of the Google business profile. He then found that he was only registered as an administrator. As it turned out, the main owner was (still) the party that had sold the restaurant at the time.
The seller is required to change the Google Business Profile and register the buyer as the primary owner of the Google Business Profile. The buyer states that the Google company profile was the subject of the purchase agreement concluded. This would appear from the fact that € 200,000 was paid for transferred goodwill. However, the seller points out that the purchase agreement stipulates that the sale does not include the right to use or ownership of the brand name, which name is reflected in the Google company profile. The claim is therefore rejected by the court, as it has not become apparent that the buyer has any claim to the Google company profile. After all, the purchase agreement does not mention this.
In franchising relationships, it is very important for business transfer to have agreements about who is entitled to, for example, a Google company profile, but also (other) social media accounts, such as LinkedIn, Facebook or Instagtam. This can be arranged in the purchase agreement during the transfer, but it may be even better to (also) lay this down in the franchise agreement in advance.
Ludwig & Van Dam lawyers, franchise legal advice.
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