Sales over the Internet
It is impossible to imagine our society without the internet. The sale of products and services via the internet is also constantly increasing. It is therefore advisable to include provisions in franchise agreements that relate to e-commerce, for example. In this context, however, competition law regulations must be taken into account.
The general rule of competition law is that the franchisor is not permitted in franchise agreements to restrict sales by the franchisee, insofar as these restrictions relate to the territory in which or the customers to whom the franchisee may sell products or services.
However, there are four exceptions to this main rule. One of these exceptions is that the franchisor is permitted to limit active sales by franchisees to a specific exclusive territory. This implies that the franchisor may not impose any restrictions on the franchisee’s passive sales. And here lies the link with e-commerce. An example of active sales via the Internet is the sending of e-mail messages by the franchisee to (potential) customers on its own initiative. Passive selling is understood to mean the franchisee’s response to spontaneous requests from individual customers, including the provision by the franchisee of products and services to those customers. In general it can be said that the mere use of the internet cannot be regarded as a form of active selling. The consequence of this is that the franchisee must in principle be able to use the internet unimpeded to promote and/or sell products and/or services.
Is it then completely impossible for the franchisor to influence the passive e-commerce activities to be performed by the franchisee? The answer to this is negative. The franchisor is allowed to impose quality standards on the franchisee with regard to the use of a website. This could include (reasonable) requirements that the franchisor can set for the content and design (for example the use of certain colours) of the website to be used by the franchisee. So that both the franchisor and the franchisee know where they stand, it is important that the franchise contract (or the franchise handbook) sets out the rights and obligations of both the franchisor and the franchisee in the field of e-commerce, including the quality standards mentioned. , be clearly formulated.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Column Franchise+ – mr. Th.R. Ludwig: “Delivery stop by franchisor again not allowed”
Once again, the president in preliminary relief proceedings ruled on the question whether a franchisor's supply stop against the franchisee was permitted, with the franchisee paying a substantial
The manager (employee) who becomes a franchisee – fictitious employment?
On 14 December 2016, the subdistrict court judge of the District Court of Noord-Holland, ECLI:NL:RBNHO:2016:11031 (Employee/Espresso Lounge), considered the situation in which an employee
The Supreme Court sets strict requirements for franchise forecasts
A ruling by the Supreme Court on Friday casts a new light on the provision of profit and turnover forecasts to aspiring franchisees.
Infringement of exclusive service area by franchisor in connection with formula change dated February 27, 2017
On 30 January 2017, the provisional relief judge of the District Court of Noord-Holland, ECLI:NL:RBNHO:2017:688 (Intertoys/franchisee), was asked how to deal with the
Forecasts at startup franchise formula
The Amsterdam Court of Appeal ruled on 14 February 2017, ECLI:NL:GHAMS:2017:455 (Tot Straks/franchisee) on the question whether the franchisor had provided an unsatisfactory prognosis and whether the
Mandatory transfer of franchise business to franchisor?
On January 23, 2017, the District Court of Amsterdam, ECLI:NL:RBAMS:2017:412 (CoffeeCompany/Dam Spirit BV) rendered a judgment on the question whether a franchisee upon termination of the cooperation