No compensation of goodwill in franchise agreements? – January 28, 2016 – mr. AW Dolphin
On January 20, 2016, the Interim Relief Judge of the District Court of Amsterdam ruled, ECLI:NL:RBMNE:2016:353 (Ipic/franchisee Lelystad) that “compensation of goodwill is not normally an issue in franchise agreements”. The franchisor had entered into a franchise and rental agreement with a franchisee. On the basis of the provisions of Article 7:291 paragraph 2 of the Dutch Civil Code, the subdistrict court had approved the clause in the rental and franchise agreement, in the sense that, in short, upon termination of the franchise agreement, the rental agreement also ends, without a court order. intervention. Accordingly, the franchisor had terminated the franchise and lease agreement. The stipulation that deviates from the law, approved by the subdistrict court, also implies a contractually fixed remuneration to the franchisee.
The franchisee takes legal action against the termination, arguing, among other things, that the contractual termination compensation offered is too low and the franchisee is entitled to a higher goodwill compensation.
The preliminary relief judge considered that compensation of goodwill is not normally an issue in franchising agreements. This is one of the reasons why the franchisee’s argument is ignored. This consideration deserves attention. Not only because, pursuant to Section 7:308 of the Dutch Civil Code, a lessee may, under certain circumstances, claim a goodwill compensation in the event of termination by the lessor, but even more so now that the franchise agreement itself also grants compensation in the event of termination by the franchisor of the franchising property. and rental agreement. The latter occurs more often and is certainly no exception.
Incidentally, the judgment HR 12 July 2002, NJ 2002, 457 was not discussed, from which it follows that the compensation pursuant to Article 7:308 of the Dutch Civil Code cannot yet be claimed (in counterclaim) in the termination proceedings initiated by the lessor, because a claim to compensation can only arise if the business space is actually used for conducting a similar business.
It is true, however, that the compensation pursuant to Article 7:308 of the Dutch Civil Code in rental and franchise agreements is sometimes less high or difficult to allocate, precisely because it is obvious that any advantage of the lessor/franchisor in the exercise of a comparable continued business must be attributed to the franchise formula and not to the entrepreneurial activities of the former tenant/franchisee. It is of course highly dependent on the circumstances, but a goodwill compensation at the end of a franchise agreement does not seem impossible to me. Not even if this has not been agreed.
mr. AW Dolphijn – Franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Unauthorized unilateral collective fee increase by the franchisor
In an important decision of the Amsterdam Court of Appeal of 23 April 2014, the question was whether a franchisor was allowed to implement an increase in a contribution.
Interests Association of Franchisees of the Netherlands (BVFN) is in further consultation with the Minister
On April 16, 2014, the previously announced meeting between the Belangen Vereniging Franchisenemers Nederland (BVFN) and the Ministry of Economic Affairs took place.
Exoneration of duty of care with the franchisor’s prognosis
In a judgment of the Overijssel court of 9 April 2014, the interesting question arose whether a collaboration should be qualified as a franchise.
Non-competition clause is lost in summary proceedings
Recently, the preliminary relief judge in Rotterdam ruled that a franchisee was not bound by the non-competition clause included in the franchise agreement.
Advance on compensation after an unsound prognosis
In a beautifully substantiated summary judgment of the Northern Netherlands Court of 9 April 2014, the question was whether an advance should be paid for the damage assessment procedure.
Collection point requires shopping destination
In my supermarket newsletter of July 11, 2013, I already predicted that the establishment of collection points for goods ordered via the internet would set the judicial pens in motion.