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
Other messages
Judge anticipates Franchise Act: no mandatory formula change (without threshold value)
The District Court of Amsterdam ruled that a Blokker franchisee is not obliged to renovate the store in accordance with the latest formula principles, as instructed by Blokker.
Interview Mr. J. Sterk and mr. C. Rutten in Franchise+: “Call to the automotive sector: prepare yourself well for the new Franchise Act” dated October 2, 2020
The new Franchise Act has a broad effect, also in the automotive sector. But are people aware of it enough?
Article The National Franchise Guide – “Corona discount of 50% on the rent” – mr. AW Dolphijn – dated September 15, 2020
Disappointing turnover due to the corona crisis may mean that the rent is halved, even if the rent is partly turnover-related.
Article Franchise+ – “Franchisor uses “derivative formula” (without his knowledge)” – mr. AW Dolphijn – dated September 9, 2020
Many franchisors will not be aware of the fact that they use a "derived formula" as referred to in the Franchise Act.
Article Franchise+ – “Obligations and rights of the starting franchisee” – mr. AW Dolphijn – dd
What should you pay attention to as a starting franchisee, what are your obligations and what are your rights when concluding the franchise agreement?
Article Mr. C. Damen – Three conditions for the right to customer compensation for the agent upon termination of the agency agreement – dated August 26, 2020
In the agency relationship between an agent and a client (the principal), the parties record their cooperation agreements in an agency agreement. When the principal enters into the agency agreement