Infringement of non-competition clause, where is the limit?
Court of Amsterdam
In this matter, a former freelancer of massage parlor Doctor Feelgood started his own massage parlor under the name Feelgood-store. The site was located just outside the agreed post-contractual area, ie just over 15 kilometers from the nearest Doctor Feelgood site.
In the first place, it was claimed that using the name Feelgood-store would be unlawful towards Doctor Feelgood, because the new name used was too similar to the old one. However, that claim was rejected in summary proceedings because the President of the court was of the opinion that there could be no risk of confusion among the relevant public. The President was of the opinion that the names Doctor Feelgood and Feelgood-store differ too much from each other to assume that there is a likelihood of confusion, taking into account that the part Feelgood is a descriptive, general and widely used term for services and products in the personal care category, just like, for example, the term wellness, terms that are difficult to protect.
It was also considered whether there had been any other form of impermissible competition. The President considers that Doctor Feelgood has opened a massage parlor without notifying Doctor Feelgood. However, that conduct is not in itself unlawful. The Feelgood store does not violate the post-contract non-competition clause, as its business is more than 15 kilometers from the nearest Doctor Feelgood branch. Now that, in the opinion of the President, the names differ too much, as said, the President does not arrive at establishing an unlawful act by the Feelgood store.
In the eyes of the President, however, the Feelgood store has pushed the boundaries of what is permissible. In franchise relationships, the parties are therefore advised to contractually agree on what exactly the non-competition clause consists of, including which expressions are and are not permitted after the franchise agreement has expired. Naturally, this also includes similar external expressions. However, if a franchisor wants more than has been precisely and precisely agreed upon, he must come from a good house to have the post-contract non-compete clause honored. The franchisee is not bound by more than strictly agreed, if at all. In the case of franchise relations, the circumstances may mean that the non-competition clause is set aside in whole or in part.
Mr Th.R. Ludwig – Franchise lawyer
Ludwig & Van Dam Franchise attorneys,franchise legal advice.
Do you want to respond? Mail to ludwig@ludwigvandam.nl
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