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 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.
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?