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. The franchisees believed that in proceedings on the merits it would be established that the franchisor’s forecasts were unsound. To this end, the franchisees also sought rectification of the allegedly unsatisfactory forecasts, which is subject to a reversal of the burden of proof as regards misleading advertising. 

Article 6:196 of the Dutch Civil Code states that if someone advertises to another, has caused or threatens to cause damage, the court can order rectification. In the case of misleading advertising, a reversal of the burden of proof for liability also applies in the event of a suspicion of deception on the basis of Article 6:196, paragraph 2 of the Dutch Civil Code, via Article 195, paragraph 2 of the Dutch Civil Code. 

In this case it concerned announcements in the sense of a video on YouTube, a folder sent to you and material from the National Franchise Guide. According to the court, this material and, in particular, the announcement in the brochure that the franchisee is starting his own employment agency cannot be qualified as a statement pursuant to Article 6:194 of the Dutch Civil Code. After all, it is in fact a company that remains highly dependent on the franchisor. In addition, some of the announcements are contested with reasons as to whether they were made at all. This means that there is no reversal of the burden of proof. 

The franchisees demanded suspension, or at least annulment, of the non-disclosure and non-competition clause in view of the allegedly unsound prognosis. However, because the unsoundness of the forecasts is not plausible, nor is the burden of proof reversal in this regard, the claim cannot be allowed on this ground. 

As a counterclaim, the franchisor had sought to order the franchisees to comply with the agreed non-compete clause. However, that counterclaim was also rejected. The preliminary relief judge does not consider it plausible that a court on the merits follows the broad scope of the non-compete clause.

Reversal of the burden of proof in forecasting has long been an interesting theme. In this case it did not apply, despite the fact that there was advertising. The franchisees nevertheless remain not bound by the non-compete clause for the time being. 

mr. AW Dolphijn – Franchise lawyer 

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