Despite the franchisee’s counterclaim, the franchisor justified dissolution of the franchise contract

Court of Rotterdam

The Rotterdam court recently ruled that payment arrears of more than € 80,000 is sufficient for the franchisor to dissolve the franchise agreement.

The overdue payment is sufficient to terminate the franchise agreement, despite the fact that the franchisee claims that the franchisor has not made any marketing efforts or provided marketing materials, even though the franchisee has paid € 400,000 for this. However, according to the court, the alleged counterclaim is not substantiated at all. Furthermore, it has not become apparent that the franchisee has given the franchisor notice of default at any time, so that there can be no question of default on the part of the franchisor and therefore no due and payable counterclaim has arisen. Suspension of payment arrears of more than € 80,000 is therefore not justified.

The Rotterdam court therefore ruled that the franchisor was right to dissolve the franchise agreement and furthermore decreed that the franchisee may no longer act as a franchisee to the outside world. Furthermore, the claim of more than €  80,000 to be paid.

For suspension by the franchisee in such a situation it is necessary that there is a well-founded substantiation, including notice of default, and not that the unsubstantiated allegation is raised in court for the first time.

Mr Th.R. Ludwig – Franchise lawyer

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