The possibility of actively or not actively recruiting customers outside
Based on the relevant regulations, it is permitted to limit the franchisee’s active solicitation activities to its exclusive territory. In that area, the franchisee can then freely advertise and acquire customers in any other way. In that case, the franchisor should not impose any restrictions on the franchisee in actively acquiring customers within the exclusive territory. It is of course possible that certain advertisements end up outside the exclusive territory of the relevant franchisee, whether or not via the internet.
It follows from the above that when a customer, who is not located in the franchisee’s exclusive territory, turns to this franchisee, the franchisee is free to do business with this customer. This also applies, of course, if such customer contact is established via the internet or a catalogue. In that context, however, a franchisee may be prohibited from actively distributing e-mails outside its exclusive territory. This is what is known as active recruitment. In other words: if there is active sales, the possibilities of a franchisee can be limited. In summary, the above means that if a franchisor allocates an exclusive territory to its franchisee, the franchisee must have considerable freedom in acquiring customers in that territory; the so-called active sale. The franchisor can only impose restrictions if the sales activities take place in the area outside the exclusive territory of the relevant franchisee. Often this will also arise from the protection of other franchisees located in that adjacent area, each with its own exclusive area.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Magazine Franchise & Law, episode 2 (November 2015)
Ludwig & Van Dam Advocaten wrote a chronicle of case law in franchise law over the first half of 2015.
Can a franchisee leave sales channels unused?
Franchise formulas are now generally well equipped with an online sales channel.
Distribution over the franchisor’s trade name
A franchisor's trade name is one of the most important elements of the formula.
Legal workshop Turnover forecasts at Ludwig & Van Dam
Legal workshop Turnover forecasts at Ludwig & Van Dam
The rules of the game when renting a property
Buy or rent. That's the question with a new business, a subsequent building. Apart from the possibilities you have to buy another property, renting is also a good option.
From omni-channel to single-channel allowed
Can a bicycle supplier terminate the dealer agreement if the dealer no longer operates physical stores, but restricts itself to a web shop?