Supreme Court: Code of Honor regarding franchising has no legal effect – dated September 25, 2018 – mr. AW Dolphin
On 21 September 2018, the Supreme Court ruled that the European Code of Honor on Franchising is not a benchmark for legal beliefs in the Netherlands. This Code of Honor states that a franchisor must provide the prospective franchisee with all available information and other data, such as a forecast, before concluding the franchise agreement. That obligation is therefore not enforceable.
The case concerned a franchisor who had indicated that he was committed to the European Code of Honour. The franchisor had prepared an initial forecast that was less rosy than the one the franchisor ultimately provided. The franchisee believed that the initial prognosis should also have been provided and referred to the obligations under the Honor Code. The Supreme Court ruled that the franchisor has no obligation to provide a prognosis and therefore also not the initial prognosis. According to the Supreme Court, the fact that the franchisor had committed itself to the Code of Honor does not change this, because the Code of Honor is not enforceable.
Providing information prior to concluding a franchise agreement is one of the cabinet’s spearheads in the preparation of franchise legislation. The above judgment appears to underline the need for regulation by the legislator of the franchisor’s obligation to provide complete and sufficient information prior to the conclusion of the franchise agreement. The aspiring franchisee would do well to at least request all much-needed information and to be critical of this.
mr. AW Dolphin – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl
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.