The Supreme Court sets strict requirements for franchise forecasts
A ruling by the Supreme Court on Friday casts a new light on the provision of profit and turnover forecasts to aspiring franchisees.
When Is a Franchisor Liable for a Misforecast? More than 15 years ago, the Supreme Court indicated that the franchisor is acting unlawfully if it provides a forecast that it knows contains serious errors and conceals those errors. Since then, it has been held in lower case law that the franchisor only acts unlawfully if the franchisor has deliberately made and left an incorrect assumption.
On 24 February 2017, the Supreme Court (ECLI:NL:HR:2017:311) indicated that a franchisor can also act unlawfully if the forecast contains errors, without the franchisor being aware of those errors. So this is a lower standard.
Only if a franchisor has the forecast drawn up by an external party does the heavier standard of good judgment apply. In that case, the franchisor may generally (also) rely on the correctness of the forecast drawn up by the third party. The franchisor only acts wrongfully if he knows about errors in the forecast, but conceals this from the prospective franchisee.
Franchisors will have to be (even more) wary of errors in forecasts provided to aspiring franchisees. In addition to the Dutch Franchise Code and the Acquisition Fraude Act, franchisees are also supported by the Supreme Court to enforce their rights.
mr. J. Sterk and mr. AW Dolphin
Ludwig & Van Dam attorneys
![232court-min](https://www.ludwigvandam.nl/wp-content/uploads/2020/12/232court-min.jpg)
Other messages
The right to the formula name upon termination of the franchise relationship
In practice, discussions regularly occur when the franchise relationship is terminated between a franchisor and one or more franchisees
The possibility of actively or not actively recruiting customers outside
Based on the relevant regulations, active recruitment activities by the franchisee are permitted
Customers, clientele and exceptions thereto
Some franchise constructions have the characteristic that the products or services in question are only supplied to certain consumers.
Intellectual property rights
In general, the nature of a franchise relationship implies that, on the basis of a franchise agreement
Link rental agreement and franchise agreement
In franchise relations, the franchisor regularly makes business space available to the franchisee where the franchise establishment is operated.
Continuation of the franchise agreement at the then current
Franchise agreements often contain clauses that make continuation of the franchise relationship dependent