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
Other messages
Supreme Court confirms permit sale of franchisee outside exclusive district
Franchisee acquires and sells outside its territory, in territories not yet issued to other franchisees.
The further determination of the rental price of business premises at the request of the lessor/franchisor or the lessee/franchisee
Does the (sub)tenant/franchisee still pay a competitive rent for the leased business space?
Partial indebtedness of entrance fees due to lack of turnover and non-delivery of contractual performance by the franchisor
The franchisee rightly invokes unforeseen circumstances due to the lack of turnover and successfully claims moderation of the entrance fee due.
Termination of the franchise agreement does not automatically lead to termination of the sublease agreement
Franchisor terminated the franchise agreement with the franchisee. The franchise agreement stipulated that termination of the franchise agreement would also terminate the sublease agreement
Despite the franchisee’s counterclaim, the franchisor justified dissolution of the franchise contract
The Rotterdam court recently ruled that payment arrears of more than € 80,000 is sufficient for the franchisor to dissolve the franchise agreement.
Actually using a building, but without a lease
In franchising, it often happens that the business premises from which the franchisee operates his business