On the edge of a franchisee’s exclusive territory
The Arnhem-Leeuwarden Court of Appeal ruled on 15 May 2018, ECLI:NL:GHARL:2018:4395, on whether a franchisor was allowed to open a branch just over the edge of the exclusively granted protection area.
In the franchise agreement it was agreed that the franchisee will be allocated an area with a radius of 300 meters around the location. No other branch of the franchisor would be located in this area.
The franchisee complains that the franchisor did not indicate when the agreement was concluded that another branch of the franchisor would be opened 380 meters from the franchisee’s business. The franchisee has argued, among other things, that with the location on the edge of the exclusivity area there are competitive activities that would depress profitability. The franchisor is thus charged with an unlawful act for breach of the franchisor’s pre-contractual information obligation.
According to the court, the franchisee had not fulfilled its duty to state that it would not be (properly) possible to operate two profitable branches at a distance of 380 meters from each other in the center of Almere. The Court of Appeal follows the opinion of the District Court that the franchisee has insufficiently substantiated its assertions by not providing information about the turnover it has realized and about the expectations it may have had in view of the turnover figures provided to it.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
![240verbod](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/240verbod.jpg)
Other messages
Consultation: forms and possibilities
In practice, consultation between the franchisor and the franchisee often takes place through a franchise council.
New rental law
On August 1, 2003, the new rental legislation came into effect.
Clarity regarding financial obligations of franchisees
Franchisees generally have various long-term financial obligations towards the franchisor.
The possibilities regarding claiming a rent reduction then
Following on from earlier published articles of my hand, I will once again deal with a tenancy law issue below.
Catering agreements
The Netherlands Competition Authority (NMa) recently made a decision regarding the beer supply agreements submitted by Heineken for exemption.
European Code of Honor on Franchising
Article 3 of the European Code of Honor on Franchising deals with this in quite some detail