Indirect price maintenance
As is well known in franchising practice, resale price maintenance is out of the question. The franchisor who obliges a franchisee to prescribe a sales price is therefore crossing the line. What about indirect price maintenance, where price maintenance can also arise through indirect measures and/or sanctions?
Forms in which indirect price maintenance can be expressed include the following: a franchisor can price certain products in advance by means of a bar code, with the product being settled at the cash register at the predetermined price by means of scanning the product. Furthermore, in general, a binding recommendation can be made to use a certain selling price. The franchisee is expected to determine the sales price independently, but must focus on the pricing policy of the franchise organization in question. Another form of indirect resale price maintenance can arise through communicating directly with consumers over the heads of the franchisees about the sales prices in question, for example through advertising. If practice means that the franchisee then has no choice and must charge the sales price communicated by the franchisor, resale price maintenance has also arisen in this way.
All these and similar forms of indirect price fixing are inadmissible and prohibited. The sanctions for absolute price maintenance can be far-reaching, both on the part of the Netherlands Competition Authority (NMa) and on the cooperation between franchisor and franchisee itself. Under certain circumstances, the contested provision and even the entire franchise agreement may become null and void. Franchisor and franchisee would therefore be wise to adjust their contracts on this point in good time if necessary and to hold good consultations in general.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Column Snack courier no. 8: “With 7 steps you comply with the privacy law”
Much has already been written about the General Data Protection Regulation (GDPR). The law has been applicable since 25 May, but many companies have not yet had their privacy policy in order.
Forced to switch to a different franchise formula at the existing location?
If a franchise formula ceases to exist, for example if it is incorporated into another organization, the question may be whether the franchisee is also obliged to be incorporated into
Column Franchise+ – 50 percent more franchise lawsuits
The 2018 Legal Franchise Statistics published by Ludwig & Van Dam Advocaten shows that there has been a 50% increase in the number of judgments in court cases rendered in 2017 compared to
A closer look at the intention to introduce franchising legislation
On May 23rd, State Secretary Mona Keijzer informed the House of Representatives about the imminent franchise legislation. The National Franchise Guide previously published this article.
Consumer Protection Applies to Franchisee
The consumer enjoys broad protection on the basis of the Civil Code.
Update Franchise Law
On 23 May 2018, the government indicated that it would prepare a legal regulation that creates a framework for four sub-areas of cooperation between franchisors and franchisees that are crucial