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
Magazine Franchise & Law, episode 2 (November 2015)
Ludwig & Van Dam Advocaten wrote a chronicle of case law in franchise law over the first half of 2015.
Can a franchisee leave sales channels unused?
Franchise formulas are now generally well equipped with an online sales channel.
Distribution over the franchisor’s trade name
A franchisor's trade name is one of the most important elements of the formula.
Legal workshop Turnover forecasts at Ludwig & Van Dam
Legal workshop Turnover forecasts at Ludwig & Van Dam
The rules of the game when renting a property
Buy or rent. That's the question with a new business, a subsequent building. Apart from the possibilities you have to buy another property, renting is also a good option.
From omni-channel to single-channel allowed
Can a bicycle supplier terminate the dealer agreement if the dealer no longer operates physical stores, but restricts itself to a web shop?