Insured and well
Occasionally, a franchise agreement contains a clause that obliges the franchisee to take out legal expenses insurance. Taken in itself, the idea arises that this clause may be too far-reaching in the context of the legal and economic independence of the franchisee. In addition, it is up to the franchisee himself whether or not he is insured in case he needs to take out legal assistance insurance. Nevertheless, it is not unwise to include such a clause in the franchise agreement, as this is permitted in the context of independence or if it contributes to an increased risk with regard to a disguised employer/employee relationship (fictitious employment). To ensure this, prior approval must be requested from the relevant implementing body. Assuming that the clause is in order, such a clause protects the franchisee in bad weather. It should be expressly considered that the vast majority of cases in which the franchisee has to rely on legal assistance have nothing to do with the relationship with the franchisor at all. Even in such situations, however, adequate legal assistance insurance offers a guarantee for all parties involved. Statistically, however, this rarely occurs in practice, in relation to all other legal problems that can happen to a franchisee. This includes, for example, labor disputes with staff, rental problems, or, for example, problems with the municipality in connection with permits, etc. A good franchisor anticipates for the benefit of its franchisees by informing them that they can insure themselves for most forms of legal assistance. It goes without saying that the quality of that legal assistance and therefore of the legal expenses insurer is of great importance. Not only should the premium be considered, but above all the policy conditions.
Incidentally, it should be noted that a franchisor can insure itself against most disputes that may befall it. Here too, however, it is of eminent importance that a careful inventory is made before one is insured, under which conditions and whether a (specialised) lawyer can handle the matter if necessary.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Bankrupt because the franchisor refused to sell the franchise company – dated January 28, 2020 – mr. AW Dolphin
The District Court of The Hague has dealt with a request from a franchisor to declare a franchisee bankrupt.
Prescribed shop fitting – dated January 28, 2020 – mr. AW Dolphin
The Midden-Nederland District Court has ruled on whether a franchisee is obliged to carry the shop fittings prescribed by the franchisor.
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.