Relocation of franchisees
For a variety of reasons, it may be necessary for a franchisee to move their business to a different location during the term of their franchise agreement. This can be caused by problems concerning the rental relationship with the (main) lessor. This may also be prompted by economic motives, for example a changing, in particular deteriorating, market position of the existing business location. This has already been discussed in an earlier contribution to this section (business locations in motion), with an emphasis on the position of the lessor in this regard.
The question is also sometimes asked whether, when a franchisee moves, the existing franchise relationship in its entirety moves with it, as it were. However, it is lost sight of the fact that a new location, even if it is in the immediate vicinity of the old location, can still entail, and sometimes to a considerable extent, changed market conditions for the franchisee concerned. In practice, something similar can even occur when a franchisee moves within the same shopping centre. For example, the “loop” can turn out slightly different than was the case at the old location. The new location can also be arranged in such a way that an extra member of staff proves necessary to keep the relevant location running responsibly. In other words, a move can have significant consequences for the franchisee involved, both on the benefits and costs side. In the context of the foregoing, it is good franchisor practice, if possible, of course, to carry out a market and location survey of the new location in direct consultation with the franchisee concerned before the decision to move has been made. de facto in the same way as if it were a completely new franchise relationship.
In that case, any uncertainties regarding the new location can be adequately mapped out and both franchisor and franchisee can anticipate the new circumstances in a broad sense. It should be reiterated for the record that a franchisor, when approving the proposed move, bears a considerable responsibility in terms of its success, as the pre-eminently the one who is presumed to have the necessary knowledge and know-how to be able to assess whether the new business location fits within the franchise concept and can enable the franchisee to operate his business in a responsible manner. It is therefore in the interest of both parties involved to conduct a proper market and location survey in these types of situations.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Column Franchise + – mr. Th.R. Ludwig: “Towards strict liability”
The Supreme Court recently ruled in a prognosis issue.
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