Recognize qualitative obligations with a business premises franchisee in a timely manner
Court of Haarlem
The court in ‘s-Hertogenbosch was recently confronted with the following case against a municipality. At some point, the claimant (buyer) purchased a business premises in which a supermarket was operated until shortly before the date of delivery. This supermarket has moved to a larger business premises.
A qualitative obligation has been agreed for the seller, which, in short, means that the buyer may not use the purchased business premises to sell foodstuffs. A qualitative obligation has been agreed for the municipality, which – in short – means that the buyer may not use the purchased business premises for retail, unless it concerns the trade in musical instruments and electronics.
The buyer has ceased its business activities at any time and wishes to be released from the aforementioned qualitative obligations. In a previous judgment, the court in ‘s-Hertogenbosch ruled that the buyer was not (any longer) bound by the qualitative obligation towards the seller. In the present proceedings, the buyer wishes a declaratory judgment that the qualitative obligation towards the municipality has been dissolved. For example, the obligation would be in conflict with the zoning plan of the municipality itself (retail trade) and the obligation would have the consequence that competition is unlawfully distorted.
According to the court, a court can only grant such a claim for dissolution if at least ten years have passed since the conclusion of the agreement and continuing the obligations unchanged is contrary to the public interest. There must also no longer be a reasonable interest for the other party and it must not be plausible that this interest will (ever) return.
Although it has been established that the obligation results in acts contrary to the zoning plan, this does not mean that the court assumes that there is a conflict with the public interest. The fact that competition would be unlawfully distorted is not substantiated by the buyer (plaintiff). The court is also of the opinion that the municipality does indeed have a reasonable interest in enforcing the qualitative obligation, so that the claim is rejected.
The above shows all the more how (heavy) qualitative obligations can weigh on a party, even a long time after the agreement containing the obligation has been signed. Now that such obligations occur frequently, including in franchise relationships, it is therefore of the utmost importance to recognize such obligations at an early stage (read: before signing the agreement in question) and – where necessary – to identify what the consequences may be of the obligations.
Mr JH Kolenbrander – Franchise attorney
Ludwig & Van Dam Franchise attorneys, franchise legal advice Would you like to respond? Mail to info@ludwigvandam.nl
Other messages
Judge anticipates Franchise Act: no mandatory formula change (without threshold value)
The District Court of Amsterdam ruled that a Blokker franchisee is not obliged to renovate the store in accordance with the latest formula principles, as instructed by Blokker.
Interview Mr. J. Sterk and mr. C. Rutten in Franchise+: “Call to the automotive sector: prepare yourself well for the new Franchise Act” dated October 2, 2020
The new Franchise Act has a broad effect, also in the automotive sector. But are people aware of it enough?
Article The National Franchise Guide – “Corona discount of 50% on the rent” – mr. AW Dolphijn – dated September 15, 2020
Disappointing turnover due to the corona crisis may mean that the rent is halved, even if the rent is partly turnover-related.
Article Franchise+ – “Franchisor uses “derivative formula” (without his knowledge)” – mr. AW Dolphijn – dated September 9, 2020
Many franchisors will not be aware of the fact that they use a "derived formula" as referred to in the Franchise Act.
Article Franchise+ – “Obligations and rights of the starting franchisee” – mr. AW Dolphijn – dd
What should you pay attention to as a starting franchisee, what are your obligations and what are your rights when concluding the franchise agreement?
Article Mr. C. Damen – Three conditions for the right to customer compensation for the agent upon termination of the agency agreement – dated August 26, 2020
In the agency relationship between an agent and a client (the principal), the parties record their cooperation agreements in an agency agreement. When the principal enters into the agency agreement