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
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?”