The franchisee as the weaker party
Is the relationship between a supplier and a distributor similar to the relationship between a franchisor and franchisee? The District Court of Rotterdam, ECLI:NL:RBROT:2022:11463, ruled on this on 28 December 2022.
The issue concerned an agreement to distribute construction products. These products had been developed by the claimant. The defendant wanted to distribute the products. To this end, the parties entered into a distribution agreement.
However, the results of the collaboration were disappointing. The supplier demanded compliance with the distribution agreement. The distributor defended itself by making a comparison with the protection that a franchisee has as a “weaker party” in the event of incorrect forecasts. The distributor stated that it had entered into the agreement on the basis of incorrect assumptions and that the supplier had violated its pre-contractual information obligation. The distributor would have erred. The court did not follow the distributor’s reasoning.
The comparison that the distributor makes with franchise agreements and the jurisprudence about incorrect forecasts when entering into such an agreement does not hold. In franchise agreements, the franchisee is generally the weaker party, who has few options when entering into the franchise agreement to check (or have checked) the information provided by the franchisor about the franchise formula. In the present situation, the defendant is rather the stronger party who simply had the opportunity to conduct thorough research into the alleged potency of the product. For that reason alone, the situations are not at all comparable.
The court confirms that the franchisee can be regarded as a relatively “weaker party” in relation to the franchisor. Legislative history also shows that the franchise relationship is, in a sense, intrinsically unequal. This is not the case in the relationship between the supplier and the distributor, according to the court. This underlines the distinctive importance of the franchise agreement.
Ludwig & Van Dam lawyers, franchise legal advice.
Do you want to respond? Then email to dolphijn@ludwigvandam.nl
![240verbod](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/240verbod.jpg)
Other messages
Article Franchise+ – Current state of affairs Franchise Act – dated March 27, 2020 – mr. AW Dolphin
The legislative process regarding the Franchise Act continues despite everything.
Rent reduction and corona crisis – dated 25 March 2020 – mr. Th.R. Ludwig
In this turbulent time for franchisors and franchisees, many are faced with ongoing obligations that have become problematic.
Franchise agreements and the corona crisis – dated March 20, 2020 – mr. AW Dolphin
A time of draconian measures with far-reaching consequences. There is a lot of legal uncertainty, also in franchise relationships.
Recommendations by the franchisor in general terms are permitted – dated March 6, 2020 – mr. AW Dolphin
The boundary between praise in general terms on the one hand and culpable deception and misrepresentation on the other remains a difficult issue.
Article De Nationale Franchise Gids – Know-how decisive for scope of application Franchise Act – dated 5 March 2020 – mr. RCWL Albers
It will have escaped the attention of few in the sector that on 10 February 2010 the legislative proposal for the Franchise Act was submitted to the House of Representatives.
Column Franchise+ – A conflict can be prevented, just communicate well – February 2020 – mr. AW Dolphin
Formula changes are a fascinating topic. It is often the subject of conflicts, but those conflicts can be avoided.