Can a franchisee cohabit with a competing entrepreneur?
Can a franchisee violate a non-compete clause by cohabiting with someone who runs a competing business? On 12 January 2018, the Court of Central Netherlands, ECLI:NL:RBMNE:2018:1641, rendered a judgment on this question.
A franchisor had entered into a franchise agreement with a franchisee. The collaboration was then cast in a different legal construction, whereby the formula was made available to the franchisee as part of the collaboration in a limited partnership. The new agreement included a non-compete clause.
According to that clause, the franchisee was prohibited, among other things, during the term of the agreement, from working directly or indirectly, independently or in employment or in the form of a company, or from having financial or business interests in activities or from working. be in a company that is competitive or similar.
The court ruled that the franchisee had directly and indirectly violated the non-compete clause, including by interfering with another company that performs activities that are virtually identical to those of the clinics according to the franchisor’s formula. This interference was apparent, for example, from the fact that the franchisee had until recently cohabited with the owner behind the aforementioned competing company. This person had also responded on behalf of himself and on behalf of the franchisee (in the “we” form) to the letters that the franchisor had written to the franchisee about the collaboration.
A non-compete clause can stretch further than might at first sight be the case.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
Bankrupt because the franchisor refused to sell the franchise company – dated January 28, 2020 – mr. AW Dolphin
The District Court of The Hague has dealt with a request from a franchisor to declare a franchisee bankrupt.
Prescribed shop fitting – dated January 28, 2020 – mr. AW Dolphin
The Midden-Nederland District Court has ruled on whether a franchisee is obliged to carry the shop fittings prescribed by the franchisor.
Ludwig & Van Dam attorneys summon Sandd and PostNL on behalf of the Sandd franchisees – dated 9 January 2020 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) has today summoned Sandd and PostNL before the court in Arnhem. The VFS believes that Sandd and PostNL are letting the franchisees down hard.
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 co-sign the franchise agreement in addition to their franchise, for example. Sometimes franchisees refuse to do so and the franchise agreement is not signed.
Ludwig & Van Dam Advocaten assists Sandd franchisees: Franchisees Sandd challenge postal monopoly in court – dated 12 November 2019 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) is challenging the decision of State Secretary Mona Keijzer to approve the postal merger between PostNL and Sandd before the court in Rotterdam.
Franchisee trapped by non-compete clause? – dated October 21, 2019 – mr. AW Dolphin
The District Court of East Brabant has ruled that a franchisee was still bound by the non-competition clause in the event of premature termination of the franchise agreement.