When does a franchisor go too far when recruiting franchisees?

In the judgment of the Court of Appeal of Arnhem-Leeuwarden on 5 February 2019,  ECLI:NL:GHARL:2019:1024 the issue was whether the franchisor had acted impermissibly when recruiting the franchisees. The franchisor, Otto Simon, was accused of persuading the franchisees to enter into a franchise agreement for the exploitation of the Top1Toys through misleading texts on the franchisor’s website.

The franchisees are particularly concerned with the following passages on the website:

The franchisees emphasized that the franchisor is the expert in this case and that they could simply rely on the statements on the website.

The Court finds that the text on the franchisor’s website is aimed at potential franchisees and that therefore the assessment of whether this publication is misleading must be based on the knowledge and imagination of an averagely informed and observant (prospective) entrepreneur. The average commercial public should be aware of, and therefore not be influenced by, the fact that advertising often has a certain exaggeration. Against the background of those principles, the court does not consider the statements on the website of the franchisor to be misleading.

mr. AW Dolphin  – franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl