Not a valid non-compete clause for franchisee
On 18 November 2016, the preliminary relief judge of the Central Netherlands District Court, ECLI:NL:RBMNE:2016:7754, rendered a judgment in the matter concerning whether the franchisee was bound by the non-compete obligation from the franchise agreement.
After the franchise agreement was concluded, the franchisee invoked the nullification of the franchise agreement, because she stated that she had erred at the time the franchise agreement was concluded. Based on statements from the franchisor, the franchisee assumed that the formula in question was an exclusive concept. This mainly concerned the alleged exclusivity of the slimming equipment used within the formula.
However, after the start of the collaboration, it turned out that another franchise formula uses the same slimming equipment. The judge also ruled that the franchise formula actually consisted of no more than the purchase of the slimming equipment and a WhatsApp group with the other franchisees. According to the franchisor, the added value of the formula lies in the transfer of knowledge, for example by means of a handbook and basic training. The preliminary relief judge believes that it seems plausible for the time being that the nullification of the franchise agreement will be upheld.
The franchisor demanded payment of sums of money for violating the non-compete clause. However, if the franchise agreement remains null and void, the non-compete clause is deemed never to have been concluded. The franchisor’s claim is therefore rejected.
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 The National Franchise Guide – “Corona discount of 50% on the rent” – mr. AW Dolphijn – dated September 15, 2020
Disappointing turnover due to the corona crisis may mean that the rent is halved, even if the rent is partly turnover-related.
Article Franchise+ – “Franchisor uses “derivative formula” (without his knowledge)” – mr. AW Dolphijn – dated September 9, 2020
Many franchisors will not be aware of the fact that they use a "derived formula" as referred to in the Franchise Act.
Article Franchise+ – “Obligations and rights of the starting franchisee” – mr. AW Dolphijn – dd
What should you pay attention to as a starting franchisee, what are your obligations and what are your rights when concluding the franchise agreement?
Article Mr. C. Damen – Three conditions for the right to customer compensation for the agent upon termination of the agency agreement – dated August 26, 2020
In the agency relationship between an agent and a client (the principal), the parties record their cooperation agreements in an agency agreement. When the principal enters into the agency agreement
Article Mr. C. Damen – “When does the obligation to provide proof apply for the submission of the franchise agreement?” dated August 17, 2020
Does the obligation to produce information apply to showing a (franchise) agreement in proceedings if the parties to the proceedings do not have a legal relationship to the (franchise) agreement?
Article Mr. AW Dolphijn – “How do you value a franchise company with a discharge loan?” – dated August 14, 2020
A discharge loan is a proven means of franchisors to find long-term franchisees.