Silent extension
Many franchise agreements contain provisions governing the termination and possible continuation of the existing franchise agreement. It is quite often included in the franchise agreement that the agreement is tacitly renewed under the same conditions if neither party, franchisor or franchisee, cancels. Is such a regulation permissible under all circumstances?
If there is a sublease situation in which the franchisee rents from the franchisor, this is permissible in all cases as long as the sublease agreement continues and the market share of the relevant franchise organization does not exceed 30%. Please note that this market share can be regional or local as well as national.
If there is no question of subletting, tacit renewal is still possible as long as the market share of the franchise organization is below 15%. Contrary to what is sometimes thought, tacit renewal of a franchise agreement is therefore often possible in practice. It should be noted, however, that the regulation on which the possibility of tacit renewal is based for a market share of less than 15% can in theory be set aside by the court or the Netherlands Competition Authority (NMa). In a specific practical case, however, the NMa ruled that the regulation in question had to be fully respected.
When extending the franchise agreement, it is therefore really not necessary in all cases to conclude a new agreement and therefore necessarily sit down together. A simple clause that properly regulates tacit renewal for the parties is often sufficient.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
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?”
Column Franchise + – mr. Th.R. Ludwig: “Fictitious employment: DBA Act shifts responsibility”
The Deregulation Assessment of Labor Relations Act (Wet DBA) has been in force for some time now.
Article in Entrance: “Franchising”
Franchising offers great opportunities, but the practice is unruly. Quarrels between the giver and taker are the rule rather than the exception. How do you avoid misery? Control is good, but trust is better