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
Termination of franchise agreement in case of changes in leased retail space – September 27, 2019 – mr. AW Dolphin
Termination of a franchise agreement in light of a substantial change in the leased retail space.
Article De Nationale Franchisegids: “Distribution of (potential) customers prohibited?” – September 17, 2019 – mr. AW Dolphin
Within many franchise organizations, agreements are made about the recruitment of (potential) customers in a certain area.
District protection no protection against termination due to urgent own use – dated September 17, 2019 – mr. AW Dolphin
As a landlord, can the franchisor terminate the lease for urgent own use, in the sense of district protection, while this would be excluded on the basis of the franchise agreement.
Unreasonable compensation at the end of the franchise agreement – dated September 17, 2019 – mr. AW Dolphin
Some franchise agreements stipulate that the franchisee always owes the franchisor a minimum of a certain amount of costs upon termination of the franchise agreement.
Legal Franchise Statistics 2019: slight decrease in number of franchise disputes
In 2018, 44 judgments were published on Rechtspraak.nl, 12 of which were appeal cases and one in cassation (a prognosis issue against Albert Heijn).
Article De Nationale Franchisegids: “Judge again rules in favor of Domino’s franchisees” – dated September 3, 2019 – mr. RCWL Albers
At the beginning of 2018, almost all franchisees of Domino's and the Association of Domino's Pizza Franchisees submitted two issues to the court in Rotterdam.