Sale of rental rights supermarket location not allowed
Recently, the Court of Appeal in The Hague issued a directional judgment for switching locations between supermarket organisations. The case was as follows.
Supermarket chain X, a discounter, enters into an agreement to transfer exploitation rights with supermarket chain Y, a so-called full-service supermarket. Among other things, goodwill, construction facilities and tenancy rights are transferred for the location in question. It is true that personnel are also transferred, but the most important personnel, the cadre, are not transferred.
Also, no stocks and inventory are taken over. After all, the business space must be delivered to Y “empty and broom clean”, as it is called. After this, Y wants to establish a supermarket belonging to its formula. However, the landlord opposes the cooperation of X taking over the tenancy rights from Y. Such a contract takeover cannot take place without the approval of the landlord. An exception to this main rule is the statutory right to request replacement permission from the subdistrict court judge by means of a substitution authorization. That claim is the subject of debate here. However, assignment is only possible if all legal requirements are met, including, among other things, a “substantial interest” in “acquisition of a company”.
The Court of Appeal concludes that in this case there is no “company” or will be taken over if only an empty business space and thus only the rental rights are taken over. The legal rule has not been written for this, according to the court. Moreover, the Court of Appeal states that insufficient weight has also been shown. The stated financial need is too brief and therefore insufficiently plausible.
This statement is certainly interesting in relation to the agreements that supermarket organizations make on the heads of both franchisees/sub-tenants and owners of supermarket locations, who feel supported by this against having to accept a tenant/sub-lessor that is unwelcome to them. The Court of Appeal has opted for a restrictive application of the statutory substitution scheme, which is perhaps also best suited to an exception to the principle of freedom of contract enshrined in the Dutch system.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
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.
Supermarket letter – 26
Supermarket Newsletter No. 26
Link franchise agreement and rental agreement uncertain? – dated October 14, 2019 – mr K. Bastiaans
It is no exception within a franchise relationship that the parties agree that the franchise agreement and the rental agreement are inextricably linked.