Master franchising: a double dependency
Various franchise organizations in the Netherlands are based on a so-called master franchise construction, whereby the Dutch franchisor in turn is a franchisee of a foreign master franchiser, who has often designed the relevant franchise concept and operates it on such a basis in various countries . In principle, Dutch franchisees deal exclusively with their Dutch franchisor. On this basis it is relatively easy for many foreign franchise concepts to enter the local market with knowledge of the facts. In general, this figure works very well.
Sometimes, however, there are kinks in the cable. If disagreements arise between the Dutch franchisor and its franchisees, the situation essentially does not differ from that of a “normal” Dutch franchise organisation. However, it is a different matter when a disagreement arises between the master franchisor and the master franchisee. In practice, it sometimes happens that this relationship is terminated for various reasons. The question then is whether and to what extent the termination of the master-franchise relationship will affect the relationship between the Dutch franchisor and its franchisees.
The answer to that question depends somewhat on the nature of the franchise organization. It may be that, even after the termination of the master-franchise relationship, the Dutch franchisor can continue the franchise concept in such a way that not much other than a name change needs to take place. In such a situation, assuming adequate communication by the franchisor, it could be argued that the franchisees remain bound by their franchise agreements, since not much changes de facto for them. In other situations, however, the Dutch franchisor will no longer be able to deliver the agreed package of services, including, in many cases, the products from the master franchisor. As a result, the Dutch franchisor can no longer offer the agreed franchise concept to its franchisees and can therefore no longer actually comply with the franchise agreements. In some cases this will be attributable to him, in other cases there may be force majeure. In that case, however, depending on the specific circumstances, the franchisees may be able to dissolve their franchise agreements on the basis of the factual inability of the franchisor to comply with them. Again: the concrete circumstances of the case will be decisive in all cases. However, it is worth realizing that, especially from a franchisee’s perspective, a de facto double dependency is created when there is a master-franchise construction.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Agency: some outlines
In practice, questions are asked with some regularity regarding the legal nature
Rental price change
Following on from earlier published articles of my hand, I will once again deal with a tenancy law issue below.
Franchise Fees
An extremely important subject for both the franchisee and the franchisor that is invariably included in the franchise agreement concerns the franchise fees, often referred to as the term
Insured and well
Occasionally, a franchise agreement contains a clause that obliges the franchisee to take out legal expenses insurance.
Rayon protection II: limitation of the exclusive area.
As a follow-up to the contribution in the previous Newsletter, this time the (possibilities of) curtailment of the exclusive franchise area will be discussed. In most franchise agreements
Franchise Agreements and Terms and Conditions
Franchise agreements often include concise arrangements with regard to delivery and payment conditions.