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
Does a franchisee have to accept a new model franchise agreement?
On 31 March 2017, the District Court of Rotterdam, ECLI:NL:RBROT:2017:2457, ruled in interlocutory proceedings on the question whether franchisor Bram Ladage had complied with the franchise agreement with its franchisee.
Mandatory (market-based) purchase prices for franchisees
To what extent can a franchisor change agreements about the (market) purchase prices of the goods that the franchisees are obliged to purchase?
Director’s liability of a franchisee after failing to rely on an unsound prognosis.
On 11 July 2017, the Court of Appeal of 's-Hertogenbosch made a decision on whether the franchisor could successfully sue the director of a BV for non-compliance with the
Liability accountant for prepared prognosis?
In a judgment of the Court of Appeal of 's-Hertogenbosch of 11 July 2017, ECLI:NL:GHSHE:2017:3153, it was discussed that franchisees accused the franchisor's accountant of being liable
How far does the bank’s duty of care extend?
Some time ago the question was raised in case law what the position of the bank is in the triangular relationship franchisor – bank – franchisee.
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.