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
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Contribution Mr. AW Dolphijn in Contracting magazine 2018, no. 1: “The unilateral amendment clause in the franchise agreement.”
A contribution by mr Dolphijn has been published in the magazine Contracteren entitled: “The unilateral amendment clause in the Franchise Agreement”.