Mandatory transfer of franchise business to franchisor?
On 23 January 2017, the District Court of Amsterdam, ECLI:NL:RBAMS:2017:412 (CoffeeCompany/Dam Spirit BV) rendered a judgment on the question whether a franchisee is obliged to return his franchise company upon termination of the cooperation with the franchisor. delivery to the franchisor.
Before the catering entrepreneur in question entered into cooperation with the franchisor, the catering entrepreneur in question had already rented the catering business space on Dam Square in Amsterdam for some time. A catering permit was also present from the start of the rental.
A cooperation agreement, called a license agreement, was subsequently concluded between the parties, under which the franchisee obtained the right to operate the catering establishment according to a specific formula of the franchisor. It was included in that agreement that upon termination of this agreement, the franchisor was entitled to continue the business itself at the location where the franchisee worked. After the cooperation has ended, the franchisor demands from the former franchisee to offer it the lease rights to the business space in question, or at least to cooperate in substituting the franchisor as tenant.
The court considers that there is no question of a termination situation, but that the cooperation has ended by operation of law due to the passage of time. The court also considers it illogical that the franchisee was prepared to offer the lease rights to the franchisor when the cooperation ended. The court therefore rejects the franchisor’s claim to transfer the franchise company to it.
It follows from this ruling that if the parties wish to make a far-reaching agreement about the transfer of the franchise company at the end of the cooperation, this must be explicitly stated in order to avoid misunderstandings afterwards.
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 Franchise+ – “Immediate information obligations of franchisors upon operation of the Franchise Act” – mr. AW Dolphijn – dated June 25, 2020
As soon as the Franchise Act enters into force, this will have an immediate effect on franchise agreements that already exist. The question is whether the information flows are set up optimally from a legal point of view.
Senate will adopt Franchise Act – dated 24 June 2020 – mr. AW Dolphin
The House of Representatives had unanimously adopted the proposal to introduce the Franchise Act on 16 June 2020
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