Secretly another franchisee? Explanation contra proferentem
On 4 March 2015, the Court of Appeal of The Hague (ECLI:NL:GHDHA:2014:4601) issued a judgment on whether the franchisee should have been changed.
The franchise agreement stipulates that the franchise agreement may not be transferred to another person without the franchisor’s consent. Such clauses are common in franchise agreements. Often, and also in this case, there is a hefty contractual penalty for violating this provision. The idea behind this is that the franchisee wants to know exactly who the franchisee is and who is therefore also allowed to use the formula. In addition, it is in the franchisor’s interest to know exactly who to turn to in the event of non-compliance with the franchise agreement.
In the present case, the franchise agreement stipulated that a general partnership (a general partnership) was the franchisee. A partnership is a partnership of two or more persons. A BV can also be a partner. The difference between a general partnership and a BV is that a BV is an independent legal subject and a general partnership is not. Compare Section 2:5 of the Dutch Civil Code in combination with Section 2:175 paragraph 1 of the Dutch Civil Code and Section 18 of the Dutch Commercial Code, respectively.
After entering into the franchise agreement, one of the partners of the partnership had itself replaced by a BV. According to the franchisor, this created a (de facto) different contracting party than the franchisee with whom the contract was concluded. No permission was sought or granted by the franchisor. The franchisor claims the fine from the person who was previously a partner. After all, the rights under the franchise agreement have been transferred from a person to a legal entity, according to the franchisor.
The Court of Appeal ruled that if the franchisor had meant that a transfer of the company could also include a change of one of the partners, the franchisor must also formulate the relevant article in that sense. Since the franchisor had not done so, the fine cannot be claimed either. The franchise agreement, which the franchisor had drawn up, is interpreted to the detriment of the franchisor (contra proferentem) in view of the unclear explanation.
Franchisors would do well to draw up a franchise agreement with a legal expert. An unclear provision may be interpreted to the detriment of the author. In this case, the franchisor may have had a stronger legal position if, in addition to the general partnership, the partners had also been explicitly included as contracting parties.
Mr AW Dolphijn – Franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Mail to dolphijn@ludwigvandam.nl
Other messages
On the edge of a franchisee’s exclusive territory
The Court of Appeal of Arnhem-Leeuwarden ruled on 15 May 2018, ECLI:NL:GHARL:2018:4395, on the question whether a franchisor has a branch just over the edge of the exclusively granted protection area.
Can a franchisee cohabit with a competing entrepreneur?
Can a franchisee violate a non-compete clause by cohabiting with someone who runs a competing business? On January 12, 2018, the District Court of Central Netherlands ruled
Not an exclusive catchment area, but still exclusivity for the franchisee
The judgment of the District Court of Noord-Holland dated 18 April 2018, ECLI:NL:RBNHO:2018:3268, ruled on the exclusivity area of a franchisee.
Supermarket letter – 23
AH may not reduce wages when taking over personnel from AH franchisees;
Termination or dissolution of the franchise agreement by the franchisee
In principle, franchise agreements can be terminated prematurely, for example by cancellation or dissolution. On 21 March 2018, the District Court of Overijssel ruled on ECLI:NL:RBOVE:2018:1335 on
Article in Entrance: “Sending mailings”
“Can I make a file of guests' email addresses because I occasionally want to inform them online about events, promotions and new dishes?”