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
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?
Director’s liability of a franchisee after failing to rely on an unsound prognosis.
On 11 July 2017, the Court of Appeal of 's-Hertogenbosch made a decision on whether the franchisor could successfully sue the director of a BV for non-compliance with the
Liability accountant for prepared prognosis?
In a judgment of the Court of Appeal of 's-Hertogenbosch of 11 July 2017, ECLI:NL:GHSHE:2017:3153, it was discussed that franchisees accused the franchisor's accountant of being liable
How far does the bank’s duty of care extend?
Some time ago the question was raised in case law what the position of the bank is in the triangular relationship franchisor – bank – franchisee.
Burden of proof reversal in forecasting as misleading advertising?
In an interlocutory judgment of 15 June 2017, the District Court of Zeeland-West-Brabant, ECLI:NL:RBZWB:2017:3833, ruled on a claim for (among other things) suspension of the non-compete clause.