Supreme Court confirms permit sale of franchisee outside exclusive district
High Council
Franchisee acquires and sells outside its territory, in territories not yet issued to other franchisees. Franchisor objects to this state of affairs and requests them to stop this subject to dissolution of the franchise agreement. The parties will make further agreements on how to deal with the problem. Ultimately, this results in a conflict in which the franchisor dissolves the franchise contract out of court. During a court hearing, both the franchisor and the franchisee argued that the franchisee was allowed to work in territories that had not yet been assigned to anyone. In the end, the franchisor’s argument that the franchisee was not allowed to do this does not hold up either in court or in the highest instance, i.e. the Supreme Court.
NB: Franchisor and franchisee need not even have agreed that the franchisee was allowed to operate in territories that had not yet been allocated, unless otherwise agreed in this context. On competition law grounds, a franchisee is always permitted to do this and in principle a franchisee may not be restricted in this, unless a nuanced arrangement, for example reserving the areas for the franchisor itself, has been agreed between the franchisor and the franchisee.
Mr Th.R. Ludwig – Franchise lawyer Ludwig & Van Dam Franchise attorneys, franchise legal advice Would you like to respond? Mail to ludwig@ludwigvandam.nl
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Incorrect forecasts: no dissolution of the franchise agreement
On 6 January 2010, the provisional relief judge of the District Court in The Hague rendered a judgment
Can a franchisor profit from a franchisee’s default?
Can a franchisor profit from a franchisee's default?
A statutory franchise arrangement, far from our bed
A statutory franchise arrangement, far from our bed
Franchisor must take franchisee into account when determining transfer
A standard article in a franchise agreement is the so-called transfer arrangement.
Purchasing and purchase obligation right or wrong?
Purchasing and purchase obligation right or wrong?
The franchisee successfully appeals for error as a result of the forecast provided by the franchisor
The franchisee successfully appeals for error as a result of the forecast provided by the franchisor