The scope of an exclusive purchase clause in a franchise agreement
The case ruled by the Court of Appeal of ‘s-Hertogenbosch on 21 July 2015 (ECLI:NL:GHSHE:2015:2754) concerned a franchise agreement in which it was stipulated that the franchisee had to purchase at least 90%, under penalty of a fine.
The formula concerns the operation of a wholesale trade in hairdressing supplies. The franchisor argues that the franchisee does not comply with this obligation and takes the franchisee to court. The franchisee has developed (internet) activities under a different trade name. The question is whether these activities fall within the scope of the franchise agreement. The court finds that the franchise agreement itself does not indicate the scope and rules that the franchisor should not have expected that all activities in the field of hairdressing supplies would fall within the scope of the franchise agreement. The lack of clarity about the scope of the exclusive purchase clause is therefore held against the franchisor (contra proferentem).
Once again, this ruling shows the importance of a well-formulated franchise agreement. If there is any ambiguity about the interpretation, the franchise agreement can be interpreted to the detriment of the party that drafted the franchise agreement.
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
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.
Article De Nationale Franchisegids: “The interim termination of the franchise agreement” – August 12, 2019 – mr. JAJ Devilee
A franchise agreement can end prematurely in many ways.
Article De Nationale Franchise Gids: “Parliamentary questions asked about (false) self-employment franchisees” – dated 24 July 2019 – mr. M. Munnik
Parliamentary questions have recently been asked about the so-called bogus self-employment within the relationship between franchisor and franchisee.
Article Franchise+: “With our franchise formula you will earn mountains of gold.” dated 10 July 2019 – mr. AW Dolphin
The distinction between permissible promotions and misleading information remains a gray area, despite the relevant legislation.
Franchisee may purchase a range of foreign products after mandatory formula change – June 6, 2019 – mr. JAJ Devilee
The District Court of East Brabant recently dealt with an important matter in preliminary relief proceedings in which a franchisee was completely involuntarily forced to adopt an alternative formula.