Article The National Franchise Guide: “Why joint and several liability, for example, next to private?” – dated 7 January 2020 – mr. AW Dolphin

Franchisees are often asked to include the franchise agreement
sign, in addition to their franchise eg. Sometimes franchisees refuse that and
the franchise agreement is not signed. It’s amazing that
there is then so little discussion to see whether there is nothing to do
fit.

Franchisees often set up a BV to limit their own
liability in private. Not surprising, because
franchise agreements are often concluded for a longer period of time and there
also often involves significant investments. If it goes wrong, then
the entrepreneur himself remains unaffected. Signing for liability
in private, therefore, franchisees will not easily consider desirable. She
then voluntarily assume the liability in private.

Of course, franchisors don’t want things to go wrong either
franchisees, but when things go wrong, franchisors often will too
try to minimize their losses. Leave it in private
co-signing by the entrepreneur then has the aim that the entrepreneur in addition to the
bv is liable for the obligations under the franchise agreement. In
in that case, the franchisor can choose which party to address. As the
eg is “empty”, the entrepreneur can be addressed and, for example, the
surplus value on his owner-occupied home. So far will many
franchisors don’t let it come. If a franchisor notices that the
periodic fee is no longer paid, or the orders are not fulfilled
become, the franchisor will quickly stop the deliveries or the
terminate the franchise agreement.

A solution could be to agree that the entrepreneur only in very
serious cases, e.g. fraud, will be personally liable.
A ceiling in the scope of liability in private can also be set
be agreed upon. Or it can be agreed that the entrepreneur will only come in
is addressed privately after it has been established that the company really does not have a penny left
has.

By dealing creatively with the interests of both parties, this can be achieved
sometimes still signed a franchise agreement to everyone’s satisfaction
become.

Click here for the published article. 

mr. AW Dolphijn – franchise lawyer

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

Go to dolphijn@ludwigvandam.nl