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
The (in)validity of a post-contractual non-competition clause in a franchise agreement: analogy with employment law?
On 5 September 2017, the District Court of Gelderland, ECLI:NL:RBGEL:2017:4565, rendered a judgment on, among other things, the question of whether Bruna, as a franchisor, could invoke the prohibition for a
Column Franchise+ – mr. J Sterk: “Court orders fast food chain to extend franchise agreement
The case is set to begin this year. For years, the franchisee has been refusing to sign the new franchise agreement that was offered with renewal, as it would lead to a deterioration of his legal position
Not a valid non-compete clause for franchisee
On 18 November 2016, the interim relief judge of the Central Netherlands District Court, ECLI:NL:RBMNE:2016:7754, rendered a judgment in the issue concerning whether the franchisee was held
Franchise & Law No. 5 – Acquisition Fraud and Franchising Act
The Acquisition Fraud Act came into effect on 1 July 2016. This includes amendments to Section 6:194 of the Dutch Civil Code.
Does a franchisee have to accept a new model franchise agreement?
On 31 March 2017, the District Court of Rotterdam, ECLI:NL:RBROT:2017:2457, ruled in interlocutory proceedings on the question whether franchisor Bram Ladage had complied with the franchise agreement with its franchisee.
Mandatory (market-based) purchase prices for franchisees
To what extent can a franchisor change agreements about the (market) purchase prices of the goods that the franchisees are obliged to purchase?