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 De Nationale Franchise Gids – Know-how decisive for scope of application Franchise Act – dated 5 March 2020 – mr. RCWL Albers
It will have escaped the attention of few in the sector that on 10 February 2010 the legislative proposal for the Franchise Act was submitted to the House of Representatives.
Column Franchise+ – A conflict can be prevented, just communicate well – February 2020 – mr. AW Dolphin
Formula changes are a fascinating topic. It is often the subject of conflicts, but those conflicts can be avoided.
Collection fraud results in franchisor 4 years in prison and a fine of € 7 million – dated 25 February 2020 – mr. JAJ Devilee
In a highly exceptional criminal case, the court recently sentenced one of the directors of a (former) franchisor to imprisonment and a fine.
Bill Franchise Act
Legislative proposal for the Franchise Act to the House of Representatives
Article De Nationale Franchise Gids – Bankrupt because the franchisor refused to sell the franchise company – dated January 28, 2020 – mr. AW Dolphin
Can a franchisor refuse to sell a franchise business to a prospective buyer, even if it is a last resort for the franchisee?
Supermarket Newsletter – 27
Supermarket Newsletter No. 27