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
Other messages
Alex Dolphijn in the Financial Dagblad about the judgment of the Supreme Court regarding Street-One
Franchisors more liable for incorrect forecasts Franchisees can now more easily hold their parent organization liable for incorrect profit and turnover forecasts.
Supermarket letter – 17
Supreme Court: More quickly liable for forecasts
Article in Entrance: “Small print”
“When I do business with a supplier, I never read the fine print. Recently I noticed that there are all kinds of things in it that I actually do not agree with.
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On 14 December 2016, the subdistrict court judge of the District Court of Noord-Holland, ECLI:NL:RBNHO:2016:11031 (Employee/Espresso Lounge), considered the situation in which an employee
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.