Proven formula for success – a sequel
Unfortunately, in recent months it has become increasingly common for franchisees to run into problems as a result of, in short, a franchise formula that looked good on paper, but turned out not to work in practice. This often concerns small franchise organizations in the start-up phase, usually already in the first year of their existence. The cause of the problems can often be found in the fact that the franchisor in question has either just started in the sector or has been working in it for some time, but has no experience with franchising. Through their own entrepreneurship, and perhaps a dose of luck, the involved franchisor manages to set up and maintain his own company, but the franchisees are often confronted with a concept that does not work at all linked to their person. This translates into virtually no turnover and substantial losses.
The European Code of Honor on Franchising, a code of conduct to which all franchisors affiliated with the Dutch Franchise Association must adhere, but of which it is highly recommended that non-members also follow the instructions therein, stipulates that before a concept or formula is is offered to franchisees through franchise agreements, there must be a proven formula for success, and therefore a track record. That track record can be achieved, for example, by operating a pilot store for a longer period of time, a pilot project as it were, which can be used to determine whether the concept can actually function, independently of the person of the franchisor. In that case there can be a proven formula for success and only then can setbacks as referred to above, often with very far-reaching negative consequences for the franchisees, but also for the franchisor, be prevented.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Franchise ordered to compensate franchisor for lost fee income.
A recent ruling focused on the question of whether the ...
Article Franchise+: “Is the franchisor bound by the statutes of the franchisees’ association?” – mr. M. Munnik – dated November 11, 2021
Within a franchise organization it is not uncommon for franchisees ...
Article The National Franchise Guide: “Humps in the standstill period” – mr. T. Meijer – dated October 19, 2021
The Franchise Act has been seen by a large number ...
Unilateral changes to opening hours are prohibited from 1 January 2022
On July 14, 2021, a legislative amendment to the shopping ...
Litigation as a franchisees association.
The Eye Wish Opticiens franchisees have recently filed opposition to ...
Between the franchisor’s diagnosis and forecasting duty
In the leading legal scientific journal WPNR, Mr. Dolphijn a ...