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
Franchisor fails by invoking a non-compete clause
Although a non-compete clause is validly formulated in a franchise agreement, a situation may arise that is so diffuse that the franchisor cannot invoke it.
Acquisitions and Franchise Interest
It will not have escaped anyone's attention, certainly in the last year it can only be concluded that the Dutch economy is once again on the rise.
Which court for a rental and franchise agreement?
Which court is competent to rule on a related rental and franchise agreement?
Interview Franchise+ – mrs. J. Sterk and AW Dolphijn – “Reversal burden of proof in forecasts honored by court”
The new Acquisition Fraud Act indeed appears to be relevant for the franchise industry, according to this article from Franchise+.
Franchisor convicted under the Acquisition Fraud Act
For the first time, a court has ruled, with reference to the Acquisition Fraud Act, that if a franchisee claims that the franchisor has presented an unsatisfactory prognosis
Agreements Related to the Franchise Agreement
On 31 October 2017, the Arnhem-Leeuwarden Court of Appeal issued similar judgments for nineteen franchisees (ECLI:NL:GHARL:2017:9453 through ECLI:NL:GHARL:2017:9472).