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
Article in Entrance: “Rentals”
“The landlord increased the prices of the property every year, but he hasn't done this for 2 years, maybe he forgets. Can he still claim an overdue amount later?”
No valid appeal to non-compete clause in franchising
On 28 February 2017, ECLI:NL:RBGEL:2017:1469, the provisional relief judge of the District Court of Gelderland ruled on whether a franchisee could be bound by a non-compete clause.
Structurally unsound revenue forecasts from the franchisor
On 15 March 2017, the District Court of Limburg ruled in eight similar judgments (including ECLI:NL:RBLIM:2017:2344) on the franchise agreements of various franchisees of the P3 franchise formula.
Franchisee obliged to cooperate with formula change?
On 24 March 2017, ECLI:NL:RBAMS:2017:1860, the preliminary relief judge of the Amsterdam District Court once again considered the issue in which Intertoys wishes to convert Bart Smit's stores
Delivery stop by franchisor not allowed
On 9 February 2017, the preliminary relief judge of the District Court of Gelderland, ECLI:NL:RBGEL:2017:1372, ruled that a franchisor had not fulfilled its obligation to supply the franchisee
Alex Dolphijn in the Financial Dagblad about the judgment of the Supreme Court regarding Street-One
Franchisors more liable for incorrect forecasts Franchisees can now more easily hold their parent organization liable for incorrect profit and turnover forecasts.