Article The National Franchise Guide – “Corona discount of 50% on the rent” – mr. AW Dolphijn – dated September 15, 2020

Disappointing sales due to the corona crisis could mean that
the rent is halved, even if there is a partial
turnover-related rent.

The judge in preliminary relief proceedings of the District Court of Amsterdam has a meaningful point
statement made. A catering company had concluded a franchise agreement
for operating a hotel business. With the owner of one
hotel building was leased. The tenant had since March 6
2020 the rent is no longer paid, because from the beginning of March 2020 the turnover
had fallen dramatically due to the consequences of the
corona crisis. In mid-March 2020, the Dutch government has various
measures taken in connection with the coronavirus, with the result that the
company had to be partially closed to the public. The
The catering company has suffered a lot of damage as a result.

One of the aspects that was discussed in the lawsuit in summary proceedings
the question was whether the tenant had to pay the entire rent arrears. The
the lessor already had part of the rent earlier in the tenancy agreement
depending on the turnover made and stated that this is sufficient for the tenant
is met.

According to the judge in preliminary relief proceedings, the consequences of the corona crisis are not in sight
included in the rental agreement, not even because there is a
partly turnover-related rent. That revenue-related portion of the
rent concerns – in relation to the fixed part of the rent – a
relatively low amount. According to the judge in preliminary relief proceedings, the parties will do so
intended to dampen the consequences of turnover fluctuations, in the sense that the
total rent may be higher or lower depending on the realized turnover
fall out. However, nothing more should be considered here
fluctuations caused by expected and thus foreseen
circumstances and not to one at the time of entering into the
rental agreement completely unforeseeable circumstance such as the
corona crisis.

Thus, the judge in preliminary relief proceedings ruled that from at least the second
a rent discount will be applied in the quarter of 2020. Now neither
parties can be blamed for the occurrence of the unforeseen circumstances
are made, the financial disadvantage is obvious for the time being
parties, so that the judge in preliminary relief proceedings will provisionally assume this
that the maximum rent discount of 50% in the proceedings on the merits will be
applied, in the sense that the rent payment obligation from the second
quarter of 2020 will be suspended at 50% until the merits are settled
will be decided. It will also be stipulated that the tenant meets this
suspension cannot derive any rights if not received within four weeks after
is currently instituting proceedings on the merits against the lessor. Then there will be one
final judgment will be formed whether the suspended amount has not been paid
need to be.

For franchisees who are also tenants and who, as a result of the
facing rent arrears due to the corona crisis, a (temporary)
a rent reduction of 50% would be a welcome concession.

mr. AW Dolphijn – franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Want
you respond? Go to dolphijn@ludwigvandam.nl