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
Know-how franchise formula now also legally protected
Know-how is one of the most essential parts of a franchise formula.
Franchisors may no longer impose changes to shopping hours
At the end of 2018, a draft of the “Freedom of Choice for Retailers (Opening Hours) Act” was presented.
Draft bill on franchising
A law is being drafted for the franchising industry to improve relations between franchisors and franchisees.
No franchise agreement, despite the designation
Not everything is what it looks like. Even if the franchisor and franchisee believe that there is a franchise agreement, the legal situation may be different.
Compensation for reputational damage to the franchisor
A developer of a digital platform for a franchisor had provided a platform that any third party could access.
Sale of a franchise company due to a non-competition clause: False construction or not?
Franchisees who are unwilling or unable to continue with the franchise company experience whether or not the non-competition clause is valid or not.