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
Non-competition clause unreasonably onerous
Non-competition clause unreasonably onerous
Ludwig & Van Dam main sponsor partner National Franchise Congress 4 October 2012
The world goes on. And it seems to be getting faster and faster. It took 130,000 years before we invented the steam engine around 1750.
Failure to provide the data underlying the forecasts will justify dissolution
Failure to provide information on which the forecasts are based is possible
Non-competition clause in the franchise agreement should not be lightly brushed aside due to (alleged) incorrect forecasting and non-performance and/or reasonableness and fairness
The Court of Appeal of 's-Hertogenbosch recently ruled on the question whether a franchisee is
Rent goodwill in franchise relationship
Rent goodwill in franchise relationship
Terms of payment
Franchisees and franchisors regularly send invoices to each other (and also to third parties).