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
Franchisee obliged to cooperate with formula change?
On 24 March 2017, ECLI:NL:RBAMS:2017:1860, the preliminary relief judge of the Amsterdam District Court once again considered the issue in which Intertoys wishes to convert Bart Smit's stores
Delivery stop by franchisor not allowed
On 9 February 2017, the preliminary relief judge of the District Court of Gelderland, ECLI:NL:RBGEL:2017:1372, ruled that a franchisor had not fulfilled its obligation to supply the franchisee
Alex Dolphijn in the Financial Dagblad about the judgment of the Supreme Court regarding Street-One
Franchisors more liable for incorrect forecasts Franchisees can now more easily hold their parent organization liable for incorrect profit and turnover forecasts.
Supermarket letter – 17
Supreme Court: More quickly liable for forecasts
Article in Entrance: “Small print”
“When I do business with a supplier, I never read the fine print. Recently I noticed that there are all kinds of things in it that I actually do not agree with.
Column Franchise+ – mr. Th.R. Ludwig: “Delivery stop by franchisor again not allowed”
Once again, the president in preliminary relief proceedings ruled on the question whether a franchisor's supply stop against the franchisee was permitted, with the franchisee paying a substantial