No right to extension of franchise agreement – July 6, 2020 – mr. AW Dolphin
May a franchisor refuse to renew the franchise agreement
if the franchisee does not agree to amended terms and conditions of a
new franchise agreement to be concluded? The District Court of Limburg ruled in
a judgment in summary proceedings of 29 May 2020, ECLI:NL:RBLIM:2020:3860, which in
the case presented, the franchisor was allowed to part with the
franchisee.
The franchisee took the position that the franchisor
acts unlawfully or misuses its authority and
dominant position, by imposing unreasonable conditions for renewal
and by refusing to further negotiate renewal on a reasonable basis
terms or give them more time to sell. If the
franchisee would be forced to cease operation, there would be
enormous damage.
The franchisor had always taken the initiative to change the existing
franchise agreements. She pointed out that
request for extension had to be made no later than six months before its expiry
be submitted and how it should be done. Franchisee has it
never requested such an extension on its own initiative and in a timely manner.
The franchisee had changed positions over time.
Initially they did not want to extend, then they did, but not on
conditions according to the new agreement, then they wanted the
selling branches.
The franchisee is ordered to terminate the use of
the franchise formula under penalty of a penalty.
It strongly depends on the situation whether and how
franchise agreement is legally terminated and how the
negotiations have to be qualified, who does this (on each occasion).
takes the initiative and what the position of the parties is.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Want
you respond? Go to dolphijn@ludwigvandam.nl
Other messages
Article De Nationale Franchise Gids: “Information obligations of the intended franchisee under the Franchise Act” – dated August 7, 2020 – mr. AW Dolphin
Although the purpose of the Franchise Act is to protect franchisees against franchisors, a number of obligations have also been laid down for franchisees.
Legislative text of the Franchise Act – dated July 24, 2020 – mr. AW Dolphin
The legal text of the Franchise Act was published in the Staatsblad on 1 July 2020. The full legal text reads as follows:
Law Franchise – dated July 23, 2020 – mr. AW Dolphin
The Franchise Act will have a considerable impact on both franchisors and franchisees.
Contractual dissolution requirements not observed? No legal dissolution of the franchise agreement – dated July 23, 2020 – mr. C. Damen
Can a franchisor terminate the franchise agreement if it has failed to comply with its own contractual requirements?
Legal ban on unilaterally changing opening hours by the franchisor – July 13, 2020 – mr. J. Strong
Legislative proposal of the State Secretary which, in short, means that the shopkeeper may not be bound by unilateral changes to the opening hours during the term of the agreement.
No right to extension of franchise agreement – July 6, 2020 – mr. AW Dolphin
Can a franchisor refuse to renew the franchise agreement if the franchisee does not agree to amended terms of a new franchise agreement?