Every forecasting issue is different
It is not always easy to prove that a franchisee has actually been misled by a franchisor in providing a forecast. A good example of this are the rulings on prognosis disputes that Biretco has had with franchisees.
In a judgment of 15 June 2016, ECLI:NL:RBZWB:2016:3723, the District Court of Zeeland-West-Brabant formed a judgment on a dispute between a franchisee and Biretco as franchisor. In previous court cases, Biretco had bitten the dust, see for example the District Court of Zeeland-West-Brabant in a judgment of 8 July 2015, ECLI:NL:RBZWB:2015:6952 and the judgment of the Court of Appeal of ‘s-Hertogenbosch 12 March 2013, ECLI :EN:GHSHE:2013:BZ4057. In this case, the franchisee has been put in the wrong.
The franchisee accused the franchisor, among other things, of having presented an unsatisfactory prognosis. However, the operating overview presented by the franchisor consists of historical data supplied by the franchisee. The court is of the opinion that neither unsubstantiated figures nor forecasts are involved. There is therefore no question of an incorrect statement by the franchisor, or at least a failure to provide information.
Also with regard to a presentation of key financial figures, the court is of the opinion that the key figures only concern a calculation of the gross profit margin that could be achieved with a certain sales mix. According to the court, the franchisee had not provided sufficient evidence to conclude that Biretco made unfounded statements to the franchisee, let alone forecasts.
The franchisee also alleged that it had not provided sufficient care and assistance when it turned out that the forecasts had not come true. However, the franchisor has argued that it tried to support the franchisee in its business operations by drawing up a plan of action. The franchisor also argued that it provided bi-weekly support to the franchisee through an account counselor. The court then ruled that the franchisee had not sufficiently proven that the franchisor had violated its duty of care.
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
How do I keep my location? – June 6, 2019 – mr. K. Bastian
Location is of great importance to franchisors and franchisees, especially in the retail sector.
Supermarket letter – 25
Supermarket Newsletter No. 25
The benchmark for franchise forecasts – dated 29 May 2019 – mr. AW Dolphin
On 19 March 2019, the Den Bosch Court of Appeal, ECLI:NL:GHSHE:2019:1037, listed the case law of the Supreme Court on prognosis in franchising.
Franchise arbitration: too high a threshold? – mr. M. Munnik
When entering into an agreement, it is possible for the parties - contrary to the law - to designate a competent court. This also applies to the franchise agreement. Of this possibility
Franchise appeal for error due to incorrect forecasts and lack of support rejected – dated April 25, 2019 – mr. K. Bastian
The Court of Appeal of 's-Hertogenbosch ruled (ECLI:NL:GHSHE:2019:697) on the question whether the mere fact that forecasts did not materialize justifies the conclusion that the franchisee has been shortchanged...
Article De Nationale Franchise Gids: “Increasing protection against recruiting franchisees” – dated 2 April 2019 – mr. AW Dolphin
It is becoming increasingly apparent that recruited franchisees can be protected on the basis of the Acquisition Fraud Act.