Franchisees: do not conclude arbitration clauses, but do take out legal expenses insurance
In conflicts between franchisor and franchisee, it often happens that the parties do not fight with equal arms. This may be due, among other things, to the fact that the franchise agreement contains an arbitration clause. Arbitrators must be paid for by the parties. The costs of such a procedure can therefore turn out to be extremely high. In practice, this more than once means that the franchisee is unable to litigate against the franchisor, who is generally better able to finance arbitrators. Consequence: the franchisee has no possibility to start arbitration proceedings or sometimes even to defend himself. Arbitral clauses in franchise agreements therefore entail legal inequality. There is then no question of equality of arms, one of the basic principles in a civilized constitutional state.
In addition, it is more than once problematic for a franchisee to obtain legal assistance when this is indicated. If the franchisee needs to hire a lawyer, it is not always easy to pay this service provider. This problem can be overcome if the franchisee insures himself of legal assistance when entering into the franchise agreement by taking out legal assistance insurance. This prevents the franchisee from being unable to obtain adequate legal assistance on financial grounds.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
On the edge of a franchisee’s exclusive territory
The Court of Appeal of Arnhem-Leeuwarden ruled on 15 May 2018, ECLI:NL:GHARL:2018:4395, on the question whether a franchisor has a branch just over the edge of the exclusively granted protection area.
Can a franchisee cohabit with a competing entrepreneur?
Can a franchisee violate a non-compete clause by cohabiting with someone who runs a competing business? On January 12, 2018, the District Court of Central Netherlands ruled
Not an exclusive catchment area, but still exclusivity for the franchisee
The judgment of the District Court of Noord-Holland dated 18 April 2018, ECLI:NL:RBNHO:2018:3268, ruled on the exclusivity area of a franchisee.
Supermarket letter – 23
AH may not reduce wages when taking over personnel from AH franchisees;
Termination or dissolution of the franchise agreement by the franchisee
In principle, franchise agreements can be terminated prematurely, for example by cancellation or dissolution. On 21 March 2018, the District Court of Overijssel ruled on ECLI:NL:RBOVE:2018:1335 on
Article in Entrance: “Sending mailings”
“Can I make a file of guests' email addresses because I occasionally want to inform them online about events, promotions and new dishes?”