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 Franchise+ – Franchisees enjoy the same protection as employees and commercial agents with regard to a non-competition clause – dated 7 May 2020 – mr. RCWL Albers
It often happens that, especially by franchisees, the validity of a post-contractual non-compete clause is considered too lightly.
The support agreement for the Retail sector in this Corona crisis – dated 15 April 2020 – mr. K. Bastian
On April 10, 2020, the Ministry of Economic Affairs, together with a number of landlords, retailers and banks, reached a support agreement.
Court rules that corona crisis does not constitute force majeure – dated April 10, 2020 – mr. AW Dolphin
If payment cannot be made due to a decrease in income, then there is not always a force majeure situation.
Important information for directors of franchisees associations: Online meetings and decision-making in times of corona – dated April 10, 2020 – mr. J. Strong
Emergency law provisions for legally valid decisions without physically meeting within the association structure.
Unilateral amendment of the franchise agreement by the franchisor allowed? – dated April 7, 2020 – mr. K. Bastian
Is the franchisor allowed to implement certain announced changes/adaptations to the formula on the basis of the franchise agreement agreed between the parties?
Legal scientific publication: “Collective actions of franchisees” – dated April 2, 2020 – mr. AW Dolphin
An article by mr. Alex Dolphin