Judge: Protect franchisee against supermarket organization (Coop) as lessor
Does the franchisee need legal protection from supermarket franchisor Coop? The District Court of Rotterdam ruled on 9 February 2018, ECLI:NL:RBROT:2018:1151, that this is the case.
In the event of (premature) termination of the franchise agreement, the rental agreement does not also end automatically. Franchisors often stipulate in their contracts with the franchisee that the duration of the franchise agreement and the lease agreement run synchronously. That provision is in principle invalid.
If a supermarket entrepreneur rents the business space from the franchisor, then the entrepreneur is very dependent on the franchisor. Fortunately, the law has rent protection rules. For example, if the franchise agreement ends, the rental agreement does not also end.
Together with a franchisee, Coop had asked the court for permission to link the duration of the franchise agreement to the duration of the rental agreement. The court makes it clear that the franchisee does not have such a social position compared to Coop. The franchisee requires legal rent protection towards Coop.
It is not the first time that if the franchise agreement ends, the supermarket entrepreneur can operate another formula, despite still renting from the old supermarket organization.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
Article De Nationale Franchise Gids: “Reinvestment obligation for franchisees has limits” – dated October 13, 2020 – mr. RCWL Albers
In practice, it often happens that franchisors choose to renew their franchise formula and the appropriate image
Judge anticipates Franchise Act: no mandatory formula change (without threshold value)
The District Court of Amsterdam ruled that a Blokker franchisee is not obliged to renovate the store in accordance with the latest formula principles, as instructed by Blokker.
Interview Mr. J. Sterk and mr. C. Rutten in Franchise+: “Call to the automotive sector: prepare yourself well for the new Franchise Act” dated October 2, 2020
The new Franchise Act has a broad effect, also in the automotive sector. But are people aware of it enough?
Article The National Franchise Guide – “Corona discount of 50% on the rent” – mr. AW Dolphijn – dated September 15, 2020
Disappointing turnover due to the corona crisis may mean that the rent is halved, even if the rent is partly turnover-related.
Article Franchise+ – “Franchisor uses “derivative formula” (without his knowledge)” – mr. AW Dolphijn – dated September 9, 2020
Many franchisors will not be aware of the fact that they use a "derived formula" as referred to in the Franchise Act.
Article Franchise+ – “Obligations and rights of the starting franchisee” – mr. AW Dolphijn – dd
What should you pay attention to as a starting franchisee, what are your obligations and what are your rights when concluding the franchise agreement?