Gathering evidence for faulty prognosis

The Court of Appeal in Den Bosch ruled in a judgment of 17 February 2015 (ECLI:NL:GHSHE:2015:556) that a franchisee is not allowed to inspect the records of the previous franchisee at the same location. This claim was directed against the administrative office of, among others  the previous franchisee. The franchisee demanded access to substantiate its position that the franchisor had presented an unsound forecast. 

If a prognosis issued by the franchisor does not materialise, then according to settled case law, this in principle does not necessarily mean that the prognosis was unsound. It may then be useful if the relevant franchisee is given access to the administration of, for example, the previous franchisee at the relevant location. The previous franchisee’s operating results may be similar to those of the current franchisee. The franchisor does have some explaining to do if he forecast a significantly better operating result for the current franchisee. 

In the present case, there was a franchisee who strongly suspected that the prognosis presented was unsound. The forecast was based on the figures of the previous franchisee and prepared by the administrative office in question. It was suspected that certain business items had been incorrectly entered under private recordings. The franchisee demanded from the administrative office to inspect the books of the previous franchisee at the location. For example, inspection was demanded of, among other things, the ledger cards of the previous franchisee.

The mere interest in such information is not enough, according to the Court. It must concern documents in which there is a direct and concrete interest. It is the plaintiff’s responsibility to state sufficiently concrete facts and circumstances from which this interest is apparent. 

Although the franchisee concerned did have an interest in this, the Court of Appeal ruled that it can reasonably be assumed that a proper administration of justice is also guaranteed without disclosure of the figures of the previous franchisees (article 843a, fourth paragraph Rv). The claim is therefore rejected. The Court of Appeal believes that the assertion that the prognosis provided was unsound can also be substantiated in other ways and therefore with other evidence. For example, witness statements had already been submitted and an expert report had been brought into the proceedings. The present claim was filed as a preliminary relief during the appeal proceedings (a so-called incident), so that there may still be room for evidence in the appeal proceedings itself. 

Gathering evidence for an unsatisfactory prognosis seems indispensable, but excess can be detrimental in special cases. It is important to estimate as accurately as possible what evidence is required and how this evidence can be provided. The franchisee is ordered to pay the legal costs of the rejected claim in the incident.

Mr AW Dolphijn – Franchise lawyer

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