The franchise agreement and the rental agreement, a desirable couple?

The concurrence of a franchise agreement and a rental agreement is also referred to as a mixed rental agreement. In this mixed tenancy agreement, mandatory rent protection prevails. The concurrence of a rental agreement and a franchise agreement poses a difficult problem. In particular, the question of whether termination of the franchise agreement also entails termination of the rental agreement has not led to clear rules either in the literature or in case law. Nevertheless, it remains desirable and useful to request a link between these agreements.

In practice, it is important for the franchisor/lessor to ensure that if the franchise agreement comes to an end, the rental agreement will also be terminated with effect from the same date. The situation in which the franchise agreement comes to an end, but the franchisee/lessee continues to occupy the rented property on the basis of a continuous lease, is a thorn in the flesh for the franchisor/landlord. If the terms of both agreements and the notice periods are equal (for example 5 + 5 years and 1 year respectively), and the termination grounds in both agreements correspond, there is in principle no risk of a continuous lease from the moment the franchise agreement comes to an end. comes. Insofar as the franchisor/landlord and the franchisee/lessee have valid reasons to deviate from the semi-mandatory provisions of tenancy law, they can request approval from the court for the deviating stipulations on the basis of Section 7:291(2) of the Dutch Civil Code. .

Strictly speaking, the law does not prohibit approval from being requested after the lease has been entered into, but requesting approval after the expiry of a certain period of several years after the commencement of the lease will fail. This has already been confirmed a number of times in case law.

In the interest of legal certainty for the franchisee/lessee, it is preferable that the franchisor/landlord and the franchisee/lessee request approval for one or more deviating stipulations in advance and preferably already during the negotiation phase, preferably jointly. After all, only after approval has been granted by the court are the stipulations deviating from semi-mandatory law no longer voidable.

Approval for a deviating clause can only be requested and obtained for one or more specific clauses and not for the entire rental agreement. The subdistrict court is not authorized to approve the entire agreement, since the law has the authority to approve the deviating stipulations. This is also confirmed in a judgment of the Eindhoven Subdistrict Court of 20 April 1983, Prg 1983, 1973

It is preferable to submit a request jointly. Not only because the parties have already reached an agreement, but also because this has an expediting effect.  

All too often we come across rental agreements that state that the parties will request the court to approve the deviating terms, but that this request has never been made. The consequence of this is that the deviating stipulations that have not been approved are voidable. This can therefore be prevented by submitting a request in advance, when both parties are still alert.

Ludwig & Van Dam franchise attorneys, franchise legal advice