Termination of the franchise agreement does not automatically lead to termination of the sublease agreement
Court of Dordrecht
Franchisor terminated the franchise agreement with the franchisee. The franchise agreement stipulated that termination of the franchise agreement would also terminate the sublease agreement. However, the subdistrict court does not follow this reasoning at all. The termination of the rental agreement does not comply with the legal provisions and is therefore not legally valid. The stipulations in the lease on which the franchisor relies are deviating stipulations that have not been approved in advance by the subdistrict court judge and are therefore null and void.
In its recently issued judgment, the subdistrict court also considers that, although the franchise agreement and the rental agreement state that agreements are inextricably linked and that the end of one agreement also ends the other, there is no question of a so-called mixed agreement, and that the legal rent regime would also have been set aside. After all, both agreements can also exist independently of each other.
A proper link in advance with approval by the subdistrict court judge might have led to a different judgment. It is also remarkable that the Supreme Court has followed the doctrine of mixed agreements in recent years. Lower case law, however, apparently assumes the mandatory tenancy regime in which the franchise agreement exists separately from the sublease agreement, so that the franchisee enjoys full rent protection.
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
Termination of franchise agreement in case of changes in leased retail space – September 27, 2019 – mr. AW Dolphin
Termination of a franchise agreement in light of a substantial change in the leased retail space.
Article De Nationale Franchisegids: “Distribution of (potential) customers prohibited?” – September 17, 2019 – mr. AW Dolphin
Within many franchise organizations, agreements are made about the recruitment of (potential) customers in a certain area.
District protection no protection against termination due to urgent own use – dated September 17, 2019 – mr. AW Dolphin
As a landlord, can the franchisor terminate the lease for urgent own use, in the sense of district protection, while this would be excluded on the basis of the franchise agreement.
Unreasonable compensation at the end of the franchise agreement – dated September 17, 2019 – mr. AW Dolphin
Some franchise agreements stipulate that the franchisee always owes the franchisor a minimum of a certain amount of costs upon termination of the franchise agreement.
Legal Franchise Statistics 2019: slight decrease in number of franchise disputes
In 2018, 44 judgments were published on Rechtspraak.nl, 12 of which were appeal cases and one in cassation (a prognosis issue against Albert Heijn).
Article De Nationale Franchisegids: “Judge again rules in favor of Domino’s franchisees” – dated September 3, 2019 – mr. RCWL Albers
At the beginning of 2018, almost all franchisees of Domino's and the Association of Domino's Pizza Franchisees submitted two issues to the court in Rotterdam.