Franchise council: necessity or wisdom?
When developing a franchise organization, the usefulness and necessity of a franchise council is invariably discussed. One of the first questions that comes to mind is whether a franchise council is mandatory. The answer is no. There is no legal rule that requires the franchisor and franchisee to establish a franchise council. However, the widely held view is that a franchise council is of course very useful. Such a council is usually set up when there are five and ten franchisees respectively. However, is it now necessary in that situation to actually move to a franchise council?
Not in itself. A franchise council is nothing more or less than a means of communication between the franchisor and franchisees. In a mature franchise council, ideas are exchanged on various topics such as purchasing, marketing, market development, etc. However, this consultation can also take place in another way. For example, (informal) consultation can take place on various topics with all franchisees together, or with a relevant part of them. This can take place in a form-free meeting. It is of course also possible to record this. It is primarily important that the franchisor and franchisee exchange ideas openly and that the parties express their concerns about their concerns. It is important that this opportunity is provided in all openness. If this happens, then strictly speaking it may not even be necessary to formally structure the consultation in the form of a franchise council. This also means that it is wise to set up a franchise council at some point. A good franchise council meets at least a few times a year. The sitting franchisees are ideally delegated by their own supporters, so that their contribution is made democratically. In practice, however, it is not always easy to find willing candidates and it is necessarily chosen that the franchisor itself recruits and appoints the candidates.
Spontaneous consultation can therefore fulfill the same function as a well-functioning franchise council. It is important that this is actually implemented regularly and that there is sufficient opportunity to do so.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Judge: Protect franchisee against supermarket organization (Coop) as lessor
Does the franchisee need legal protection from supermarket franchisor Coop? The District Court of Rotterdam ruled on 9 February 2018, ECLI:NL:RBROT:2018:1151, that this is the case.
Acquisition fraud vs. error in franchise forecasting
Who has to prove that the franchisor's forecast is unsound? In principle, this is the franchisee. If the franchisee invokes the Acquisition Fraud Act, it may be that
Obligation to sell back at the end of the franchise agreement
Franchise agreements sometimes provide that the franchisee is required to sell back purchased assets at the end of the franchise agreement.
Supermarket letter – 20
Uncertain legal position of Emté franchisees
Position of franchisees in franchisor restructuring
Franchisees must be adequately and generously informed in advance by the franchisor about the content and consequences of (further) agreements...
Interview Franchise+ – mrs. J. Sterk and AW Dolphijn – “Reversal of burden of proof in forecasts approved by court” – February 2018
The new Acquisition Fraud Act indeed appears to be relevant for the franchise industry, according to this article from Franchise+. Alex Dolphijn of Ludwig & Van Dam assists a franchisee in a