Franchise Agreements and Terms and Conditions

Franchise agreements often include concise arrangements with regard to delivery and payment conditions. Usually these arrangements are limited to a payment term, sometimes supplemented with a sanction if this term (usually 14 days) is exceeded. In addition, however, the franchise organization also sometimes applies general terms and conditions when the franchisor in question is also the supplier of products and/or services to the franchisee. In practice, it also often happens that there are also other suppliers who supply products and/or services to the franchisee, at the instigation of the franchisor.

In practice, it appears that many franchise organizations often have different regulations next to each other: a concise regulation in the franchise agreement, in addition to separate general terms and conditions and various terms and conditions of suppliers. The latter category, in turn, consists of various conditions. For the applicability of all these terms and conditions, these must have been made known to the customer, the franchisee, and must have been explicitly declared applicable on a regular basis. Ideally, the franchisee should agree to this, and in any case not oppose this for applicability. The question arises whether it is still possible for the franchisee to make sense of the many different general terms and conditions. The same also applies to the franchisor. The limited arrangement from the franchise agreement does not harmonize in all cases with the extensive general terms and conditions of the franchisor/suppliers. The franchisor and franchisee would in any case be wise to compare the relevant part of the franchise agreement with the general terms and conditions of the franchisor/supplier. It will then become apparent whether there are duplications or omissions.

Adjustment is often a small effort. In this context, it is important, for example, whether the relevant part of the franchise agreement and the separate general terms and conditions contain a retention of title and whether this retention of title is established correctly. The franchisor and franchisee must realize that the goods in question are not subject to any other rights, such as a right of pledge, or that they are fully aware of this, and that they are aware of exactly which rights prevail under which circumstances. . It is part of good business practice that these positions are also known to any other entitled parties, such as the pledgee, in many cases a bank. The franchisor and franchisee must of course also take all these matters into account when the general terms and conditions of third-party suppliers are relevant.

Information provided by the franchisor in consultation with the franchise council can be very useful in this regard. This way it is clear and known to everyone how the various positions are. This can prevent many misunderstandings and unnecessary problems in the future when invoking the various rights.

Ludwig & Van Dam franchise attorneys, franchise legal advice