Internet sales in a franchise relationship
Internet sales are also enjoying increasing interest in conventional franchise circles. Particularly in retail, the turnover share and with it the interest in adding internet sales to the conventional formats is increasing rapidly. This phenomenon has not yet been taken into account in all franchise agreements. Particularly in those situations, the question of what is and what is not allowed arises more and more often. Is the franchisor or the franchisee free, without further agreements, to develop such activities or not? First of all, in this context, the franchisee may not be restricted in the possibilities of passive sales under competition law. The use of the internet and therefore internet sales can often be regarded as a form of passive sales. This means that the franchisor cannot simply prohibit the possibility of internet sales in the franchise agreement, or at least can only reserve this right for itself. The starting point is therefore that the franchisee must be allowed to operate its own website, provided that the internet sales are not actively aimed at sales in another issued exclusive territory or the area that is exclusively reserved for the franchisor.
Naturally, the franchisor can include rules in the franchise agreement, or preferably in the handbook, regarding the quality and formula-compliant appearance of websites and internet sales. Conversely, this is not necessarily the same. In situations where (absolute) district exclusivity has been granted, the franchisor is not automatically free to make internet sales in this exclusive district. First of all, not because the rule that passive sales must be allowed pertains to the vertical relationship from the franchisor to the franchisee and therefore does not automatically apply the other way around. If the franchisor does wish to reserve this option, it would therefore be wise for the franchisor to expressly include this in the franchise agreement. If it is not included, a discussion may arise afterwards about this form of competition by the franchisor within the exclusive territory. It is of course more obvious that the franchisor and franchisee will mainly use the possibilities of the internet to strengthen the formula. It is therefore particularly important that the (im)possibilities for this are recognized in time and that an arrangement is made for this in the franchise relationship. If such an arrangement has not been made, the franchisee may, under certain circumstances, believe that area exclusivity is being infringed improperly and file a claim for compensation for the damage suffered as a result.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![229webhop-min](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/229webhop-min.jpg)
Other messages
Franchise Act passed by the House of Representatives – dated 16 June 2020 – mr. AW Dolphin
The Franchise Act was adopted by the House of Representatives on 16 June 2020.
Sandd franchisees find satisfaction in nullifying Sandd and PostNL merger – dated 12 June 2020
The franchisees of mail delivery company Sandd went to court in November, assisted by Ludwig & Van Dam Advocaten. Court of Rotterdam rules on takeover by PostNL.
Plenary debate dated June 9, 2020 in the Lower House of the Franchise Act – dated June 10, 2020 – mr. AW Dolphin
On 9 June 2020, the legislative proposal for the Franchise Act was discussed in plenary in the House of Representatives. An amendment and a motion have been tabled.
Franchising is “a bottleneck in tackling healthcare fraud” – dated 10 June 2020 – mr. AW Dolphin
According to the various supervisory authorities in the healthcare sector, franchise constructions can be seen as a non-transparent business construction in which the supervision of professional and
Article Franchiseplus: “Franchisors participate in franchisees” – dated June 3, 2020 – mr. AW Dolphin
Franchisors are increasingly participating in the franchisee's business. There are several benefits for both the franchisee and the franchisor.
Article The National Franchise Guide – “Corona discount on rent” – dated June 2, 2020 – mr. AW Dolphin
If a rental property is obliged to be closed due to corona, there may be a right to a rent reduction, according to the Northern Netherlands court.