Article Franchise+ – “Immediate information obligations of franchisors upon operation of the Franchise Act” – mr. AW Dolphijn – dated June 25, 2020

By Published On: 25-06-2020Categories: Statements & current affairs

As soon as the passed bill enters into force, it has immediate effect
effect on franchise agreements that already exist. The plan is that Law
franchise will enter into force on 1 January 2021, so the question is whether the
information flows are legally optimally arranged.

An example of the information obligation in current franchise agreements
is the franchisor’s obligation to be accountable
about the use of the financial contributions paid by franchisees
to have. Through this obligation, the franchisee can up to
check to some extent whether the requested contributions are not unreasonably high.
Franchisees would then be able to reclaim the “overpayment”.

Another example is the franchisor’s obligation to provide certain
provide information of which the franchisor knows or reasonably knows
may suspect that it is important with a view to carrying out the
franchise agreement by the franchisee. So this is what it’s about
situations of pre-existing franchise agreements. Intended is the
provide the franchisee with the necessary transparency in a timely manner regarding certain
(proposed) acts of and developments at the franchisor. Than
can the franchisee prepare for this in good time, for example by doing so
necessary to request further information or consultation and in good time if necessary
make necessary adjustments to its own business operations or
make any financial reservations.

The information to be provided by the franchisor shall be such
manner, that that information is and remains accessible
for the other franchisee, as long as it serves the purpose. The to provide
information also serves the average franchisee within the
relevant chain clearly, comprehensibly and unambiguously formulated and
be designed.

By no means all franchise organizations have a clear picture of which information
which moment to share. Sometimes it is so important
trade secrets that it is undesirable to place the franchisees in a (too)
information at an early stage. It seems that many franchisor rush
will have to deal with the organization of legal information flows.
Diligence is called for now that January 1, 2021 is fast approaching.

mr. AW Dolphijn – franchise lawyer

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