Unreasonable compensation at the end of the franchise agreement – dated September 17, 2019 – mr. AW Dolphin
This is stipulated in some franchise agreements the franchisee always owes the franchisor at least a certain amount of costs upon termination of the franchise agreement. On 20 August 2019, the Arnhem-Leeuwarden Court of Appeal ruled, ECLI:NL:GHARL:2019:6745, that in the event that such costs are unreasonably onerous. The the departing franchisee therefore did not have to pay it.
The franchise agreement required the franchisee to always pay a minimum of € 5,400 in back-office costs upon termination of the franchise agreement. Franchisee has the annulment of this provision is invoked because it is considered general terms and conditions be considered and it would be unreasonably onerous (see Article 6:233, preamble and under a BW). The franchisee had argued that it back-office system was not functioning and that the height of the relevant costs are disproportionate to the actual costs. The franchisor had not contradicted this. That is why the court assumes that these costs for the franchisee upon termination of the franchise agreement is indeed unreasonably onerous, so the stipulation rightly nullified and the amount is not due on that ground.
It is not inconceivable that, if the franchisor had objected substantively to the unreasonable objection, the Court of Appeal would also have come to the same conclusion.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond?
Go to dolphijn@ludwigvandam.nl
Other messages
Franchise Act will take effect on January 1, 2021 – mr. AW Dolphijn – dated December 3, 2020
The Franchise Act was already adopted on July 1, 2020, but it has now also been established by Royal Decree that the Franchise Act will enter into force on January 1, 2021.
Supermarket newsletter -29-
Supermarket newsletter -29-
Article Franchiseplus: “Divide the pain” – mr. Th.R. Ludwig – dated December 1, 2020
The corona crisis has brought many franchisors and franchisees into ...
Article De Nationale Franchise Gids: “Settlement problems with franchisee who is a general partnership” – mr. JAJ Devilee – dated November 30, 2020
In a recent dispute, two ex-spouses faced each other in an appeal procedure regarding the question whether the ex-wife forfeited penalty payments against the private company.
Article Franchise+ – “Recipient’s liability in a franchise context, what exactly is that about?” – mr. K. Bastiaans – dated November 24, 2020
The phenomenon of hirer's liability means that a third party can be held liable for the debts of another under certain conditions.
Franchisor liable for errors made by a franchisee? – mr. AW Dolphijn – dated November 23, 2020
A franchise organization asked the court to declare that the franchisor is not liable if a franchisee has made a serious mistake with a customer.