Article Franchise+ – Franchisees enjoy the same protection as employees and commercial agents with regard to a non-competition clause – dated 7 May 2020 – mr. RCWL Albers

It happens quite often that, especially by franchisees, too
lightly thought about the validity of a post-contractual
non-competition clause. It is thought that franchisors are not here
without further ado, certainly not when the franchisee
terminated the franchise agreement. Recently, however, it is again
confirmed that the mere dissolution of the agreement has no consequences
for the validity of a non-competition clause. The judge makes one
interesting comparison with employees and commercial agents. 

In a recent case, the court in Maastricht considered the
validity of a post-contractual non-compete clause in a
distribution agreement. The dealer in question had his agreement
dissolved and stated that, among other things, the non-competition clause was no longer applicable
would be valid. The judge ruled otherwise.

The court has expressly considered that a distributor has no appeal
can do on compliance with a post-contractual non-compete clause
if the distributor can be seriously blamed
regarding the termination. The court specifically refers to the
legal protections that commercial agents or employees have in this regard
and states that this legislation can be applied by analogy to
the distribution agreement not regulated by law. Next came the
court in this matter concluded that the distributor is not serious
could be blamed for the termination. The single
dissolution, which incidentally did not last in this case, is therefore, according to the
court insufficient to enforce the post-contractual non-competition clause
to be invalid, for that the heavier standard of the
serious accusation.

In my view, this consideration also applies to franchise agreements
and thus becomes the permanent line in case law in the field of
non-competition clauses in franchise agreements confirmed and clarified.
The validity test with regard to non-competition clauses in
franchise agreements in most cases comes down to one
court’s consideration of interests. In this consideration, whether the
franchisor can be blamed for the franchise agreement
finished. The judge in Maastricht makes that clear once again
(just as with employers or principals in agency relationships).
must be due to serious misconduct on the part of the franchisor.
The threshold for this is therefore high.

This emphatic analogy with employment contracts and
agency agreements is new, but the underlying benchmark
endorses a consistent line in case law for years
non-competition clauses. Finally, I note that the culpability
with regard to the termination, this concerns only one of the many grounds
can be laid on the basis of setting aside a
non-competition clause. The jurisprudence is very casuistic and it is therefore
It is advisable to get good advice about the chances of success.

Click here for the published article. 

mr. RCWL Albers – Franchise Attorney

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Want
you respond?

Go to albers@ludwigvandam.nl