Mandatory franchise council?
Not in all cases does the franchise agreement contain a reference to the franchise council or a comparable body. Are franchisor and franchisee required to maintain such a council or similar body?
Strictly speaking, it is not necessary for a franchise council to be present. However, it is advisable to have proper and careful consultation in some way between franchisees and franchisor. There is more than one reason for this. A balanced franchise relationship is one of the elements that emphasize the independence of the franchisee, in order to prevent a disguised employer/employee relationship (fictitious employment). In that context, careful consultation about purchasing, marketing, training, etc. is of eminent importance. A good franchisor is therefore wise to set up and keep a mature franchise council alive. Ideally, the franchise council should be democratically composed.
Obviously, preventing a disguised employer/employee relationship is not the only, otherwise defensive, motive for setting up a franchise council or similar consultative body. After all, it is in the interest of all involved that proper consultation takes place on a regular basis on the above subjects, so that this can lead to improvements for the benefit of the entire franchise organization.
In addition, significant revisions of the franchise formula, for example consisting of a general restyling, accompanied by substantial investments, are simply unfeasible if there is not at least a consensus on this among the franchisees. In order to create this support, a franchise council is also very important in that context. In this way, everything can be carefully considered before individual coordination and agreement with the franchisees can take place.
Forms other than a franchise council can work just as well. It is important that a representative representation of the franchisees forms a serious discussion partner for the franchisor and that the advice and recommendations of the consultative body are of course taken to heart.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
The franchise agreement and the rental agreement, a desirable couple?
When a franchise agreement and a rental agreement coincide, one speaks
Formula switches from administrative office
In the present case there is talk of an administrative office that performs administrative work for the franchisees within a certain franchise formula.
Absence of (sub)lease agreement
A link between a franchise agreement and a rental agreement is a common phenomenon.
Franchising course for Netlaw
On February 2, 2011, Mr. Th.R. Ludwig a course for Netlaw, a partnership of various law firms in the Netherlands.
Agreement between parties
A franchise agreement is formed by an offer from one party (the franchisor)
The importance of competition law in franchise constructions in the healthcare sector
Last year, on 9 March 2010, the Netherlands Competition Authority (NMa)