Not an exclusive catchment area, but still exclusivity for the franchisee
The judgment of the District Court of Noord-Holland dated 18 April 2018, ECLI:NL:RBNHO:2018:3268, ruled on the exclusivity area of a franchisee.
It was agreed that the franchisor is in principle entitled to admit another franchisee in the same district, provided that the franchisor has offered the franchisee the opportunity in writing to expand its business to meet customer demand and that the franchisee has given you 30 days to accept this offer.
However, the franchisee and the franchisee newly admitted to the district had already worked together before, each exploiting the formula for their own account. Although this argues that the new franchisee could be admitted by the franchisor to the relevant district, the interpretation is not only governed by the content of the franchise agreement, but also by reasonableness and fairness.
It turned out that the franchisee in question, newly admitted to the district, had just been presented to the franchisor as a temporary experiment and it had been agreed, at the suggestion of the existing franchisee, that “the ownership of the franchise license and the district will remain fully in the hands of [ the (existing) franchisee]” remains. The court therefore concludes that the franchisor, after the end of the experiment, should not have allowed the new franchisee in question to enter the territory of the existing franchisee. So the circumstances dictate how the franchise agreement should be applied.
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?