Suspension post non-competition clause in Bruna franchise agreement
On 25 September 2015, the preliminary relief judge of the Utrecht District Court suspended the post-non-compete clause in a Bruna franchise agreement.
Bruna had indicated that it no longer wanted any connection with the location. At Bruna’s request, the franchisee had become the tenant of the retail property, instead of Bruna. Subsequently, Bruna had terminated the franchise agreement. The franchisee wished to continue the business under its own name. However, Bruna forbade this with reference to the post-non-compete clause.
The franchisee stated that Bruna had no interest in invoking the post non-compete clause. After all, she did not find the location interesting. The preliminary relief judge ruled in favor of the franchisee. In all fairness, Bruna has no legal interest to be respected in adhering to the post-non-competition clause.
Last year, on 16 July 2014 (ECLI:NL:RBDHA:2014:8667), Bruna was also rightly pointed out in this way that if and as long as it does not itself establish a Bruna store in the business premises, after termination of the franchise agreement, it cannot require the entrepreneur to comply with the non-competition prohibition.
If a franchisor wishes to withdraw from a certain location, this would seem to provide an opportunity for franchisees to set aside the post-non-compete clause. However, this will strongly depend on the specific franchise formula.
mr. AW Dolphijn – Franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Mail to dolphijn@ludwigvandam.nl
Other messages
The Real Intentions of the Parties to a Franchise Agreement – Mr. C. Damen – dated November 23, 2020
What really was the idea of the parties when they concluded a franchise agreement?
Circumventing the prohibition of competition in the franchise agreement – mr. AW Dolphijn – dated November 10, 2020
A non-competition clause in a franchise agreement is often experienced as objectionable by franchisees, especially if the non-competition clause also applies after the franchise agreement has expired.
Article Franchise+ – “How do I get rid of my debts: Also for franchisees and franchisors” – mr. AW Dolphijn – dated October 20, 2020
A reorganization may also be necessary for franchisees and franchisors who are in financial difficulties in order to continue to exist.
Article De Nationale Franchise Gids: “Reinvestment obligation for franchisees has limits” – dated October 13, 2020 – mr. RCWL Albers
In practice, it often happens that franchisors choose to renew their franchise formula and the appropriate image
Judge anticipates Franchise Act: no mandatory formula change (without threshold value)
The District Court of Amsterdam ruled that a Blokker franchisee is not obliged to renovate the store in accordance with the latest formula principles, as instructed by Blokker.
Interview Mr. J. Sterk and mr. C. Rutten in Franchise+: “Call to the automotive sector: prepare yourself well for the new Franchise Act” dated October 2, 2020
The new Franchise Act has a broad effect, also in the automotive sector. But are people aware of it enough?