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
When does a franchisor go too far when recruiting franchisees?
The judgment of the Court of Appeal of Arnhem-Leeuwarden on 5 February 2019 dealt with whether the franchisor had acted impermissibly when recruiting the franchisees.
Advisory Board on Regulatory Pressure (ATR) advises State Secretary Keijzer about the Franchise Act
In short, it is first advised to actively inform franchisors and franchisees about this amendment to the law.
Post non-competition ban on services and sales franchise
When a franchise agreement ends, many franchisees encounter a prohibition in the franchise agreement to perform similar work for a period of time thereafter
The concept of the Franchise Act: impact for franchisors and franchisees – dated February 5, 2019 – mr. AW Dolphin
Ludwig & Van Dam Advocaten believes that if the draft of the Franchise Act actually becomes law, a lot will change for franchisors and franchisees.
Buy franchise business and the laid off sick employee from 7 years ago
The question is whether a Bruna franchisee, when selling the franchise company to Bruna, should have stated that seven years ago an employee had left employment sick.
Court prohibits Domino’s unilateral area reduction when extending franchise agreements – dated January 28, 2019 – mr. RCWL Albers
On January 9, 2019, the District Court of Rotterdam rendered a judgment in a lawsuit initiated by the Association of Domino's Pizza Franchisees and all its members (almost all Domino's franchisees).