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 .
Other messages
Forecasts not achieved: franchisor liable. Remarkable?
The court recently rendered judgment between a franchisor and one of its franchisees.
Mistake and Void Franchise Agreement Based on False Forecast – Tort
On January 15, 2014, the District Court of the Northern Netherlands rendered an interesting judgment between Lilly's Ice Cream & Chocolate as franchisor and one of its franchisees.
Franchise contract not signed? Still bound…
Franchise contract not signed? Still bound...
Legal split at franchise and the bankruptcy pauliana
The Supreme Court recently made interesting rulings (ECLI:NL:HR:2013:2122 and ECLI:NL:HR:2013:2133 ) in a matter of legal unbundling, which is also important for the franchise practice.
The exclusive purchase clause before the court, competition
By judgment in summary proceedings of 26 November 2013, the preliminary relief judge of the District Court of Rotterdam
Services towards a new franchise model
Services towards a new franchise model