Nuanced franchise agreement on the grounds of error is a nuanced consideration
The Court in preliminary relief proceedings in Rotterdam recently ruled that a franchisor cannot simply be held responsible for any incorrect statement made by the franchisor.
In principle, an agreement can be annulled if there is a mistake. That is to say, if the franchise agreement was concluded due to such an incorrect statement from the franchisor or if relevant information was omitted, the franchisee would not have entered into the franchise agreement if he had been aware of that inaccuracy.
However, the preliminary relief judge ruled that this should be assessed in a nuanced manner and that certainly not every incorrect statement can be a reason to nullify the franchise agreement lightly. First of all, it goes without saying that the statements must have been made by the franchisor itself, prior to the conclusion of the franchise agreement. Furthermore, the adverse effect of that communication must also be really visible. It is interesting, however, that the preliminary relief judge adds that a limited exaggeration in material that is mainly promotional in nature is allowed. The case concerned the success rate of a formula that, in the franchisee’s view, presented the case too optimistically. However, according to the preliminary relief judge, the franchisee must be aware that the promotional texts used by the franchisors, especially if they are aimed primarily at the consumer, the customer of the franchisee, cannot be translated one-on-one as hard promises. According to the preliminary relief judge, franchisees should be aware that, according to general empirical rules, it is customary that promotional texts often contain some degree of exaggeration and that this is also permitted.
The judgment endorses that an appeal of error should not be lightly invoked, but should be carefully assessed. All the more so now that the consequences can be considerable for both parties. After all, if the agreement is annulled, it will be deemed never to have existed and all performances will have to be undone again. The damage to both sides is then considerable.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Termination of lease agreement after purchase of retail space
At the end of 2010, the Supreme Court ruled on the waiting period that applies to termination due to urgent personal use.
Forecast: developments franchisees
The court in Arnhem has recently again ruled on so-called 'prognosis problems'.
Webshops by the franchisor: like it or not?
Today, more and more franchisors are realizing that, in addition to the distribution channel that the franchisees form
Failing to cooperate in checking hygiene requirements of the franchisee
The court in Amsterdam recently ruled in a case where a franchisee did not meet all hygiene requirements.
‘If the employee starts franchising…’. The employer’s duty of care as a franchisor
It will not be easy to assume that a 'normal' employee has given up his employment contract. However, what...
Sale of rental rights supermarket location not allowed
Recently, the Court of Appeal in The Hague has ruled that supermarket organizations have to switch locations for the penny.