Restyling, shopfitting
Within franchise organizations it often happens that the entire shop interior needs to be replaced. Franchise formulas evolve and require adjustment and innovation from time to time. If the concept is outdated, it is important that such revision takes place in one go, with all stores ideally being presented to the consumer in the new style at the same time.
In many cases, however, the franchise agreement does not provide for such an obligation to the franchisee. It goes without saying that it is very important to first test and evaluate such an operation in the Franchise Council. With proven pilot success and sufficient consensus in the franchise council, it is obvious that all stores will subsequently be converted. The franchisee can only be obliged to do so if an adequate reinvestment scheme is included in the agreement. This reinvestment scheme provides, among other things, for reasonable depreciation periods with regard to investments made previously. In the absence of such an arrangement, the franchisee cannot simply be expected to cooperate with the conversion. The feasibility of financing the conversion is further enhanced if it can be made clear to the bank that the financial scope has been created for the imminent restyling. It should be pointed out in this respect that when offering an entirely new contract after the end of the regular five-year term, it is not automatic that such restyling can be enforced without further ado. Case law has shown that the formulation of such additional conditions in the event of a contract extension may certainly not be required without further ado.
Franchisor and franchisee are therefore wise to anticipate major changes to their franchise formula by making adequate arrangements in advance. This prevents unnecessary problems during the sometimes necessary introduction of new shop fittings.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Bankrupt because the franchisor refused to sell the franchise company – dated January 28, 2020 – mr. AW Dolphin
The District Court of The Hague has dealt with a request from a franchisor to declare a franchisee bankrupt.
Prescribed shop fitting – dated January 28, 2020 – mr. AW Dolphin
The Midden-Nederland District Court has ruled on whether a franchisee is obliged to carry the shop fittings prescribed by the franchisor.
Ludwig & Van Dam attorneys summon Sandd and PostNL on behalf of the Sandd franchisees – dated 9 January 2020 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) has today summoned Sandd and PostNL before the court in Arnhem. The VFS believes that Sandd and PostNL are letting the franchisees down hard.
Article The National Franchise Guide: “Why joint and several liability, for example, next to private?” – dated 7 January 2020 – mr. AW Dolphin
Franchisees are often asked to co-sign the franchise agreement in addition to their franchise, for example. Sometimes franchisees refuse to do so and the franchise agreement is not signed.
Ludwig & Van Dam Advocaten assists Sandd franchisees: Franchisees Sandd challenge postal monopoly in court – dated 12 November 2019 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) is challenging the decision of State Secretary Mona Keijzer to approve the postal merger between PostNL and Sandd before the court in Rotterdam.
Franchisee trapped by non-compete clause? – dated October 21, 2019 – mr. AW Dolphin
The District Court of East Brabant has ruled that a franchisee was still bound by the non-competition clause in the event of premature termination of the franchise agreement.