In a judgment of the Court of Appeal of ‘s-Hertogenbosch of 11 July 2017, ECLI:NL:GHSHE:2017:3153, it was discussed that franchisees accused the franchisor’s accountant of being liable for an unsatisfactory forecast.

The franchisor’s accountant had drawn up an investment budget on behalf of the franchisees, which provided a forecast of the expected financial results of operating a franchise establishment under the franchisor’s formula. The allegations related to the presence of a conflicting interest of the accountant, but also to some omissions in the prognosis. These omissions related, among other things, to the omission of negative effects, while positive effects were included. 

The court has appointed an expert. The expert has come to the conclusion that the prognosis is understandable and has been drawn up in accordance with the usual working method. The expert also pointed out that differences between the forecast and the actual figures are limited. Furthermore, the expert pointed out some shortcomings of the fact that the conflict of interest has not been recorded and some shortcomings are not such that the prognosis would be unreliable. 

In line with this, the Court of Appeal ruled that the accountant acted as may be expected from a reasonable acting and reasonably competent accountant.

The question of whether the prognosis is sound is assessed by the Court of Appeal on the basis of the standard for professional liability. Liability of a franchisor for a faulty forecast could also be assessed by whether the franchisor acted as would be expected of a reasonable and reasonably competent franchisor in recruiting franchisees. 

mr. AW Dolphijn – Franchise lawyer 

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .

Other messages

Fine for franchisor because aspiring franchisee is foreigner

On 5 July 2017, the Council of State, ECLI:NL:RVS:2017:1815, decided whether, in the case of (proposed) cooperation between a franchisor and a prospective franchisee, the franchisor

Article in Entrance: “Company name”

“I came up with a wonderful name for my catering company and incurred the necessary costs for this. Now there is another entrepreneur who is going to use almost the same one. Is that allowed?"

By Alex Dolphijn|01-07-2017|Categories: Dispute settlement, Franchise Agreements, Statements & current affairs|Tags: , |

Arbitration clause in franchise agreement sometimes inconvenient

On 20 July 2016, the District Court of Gelderland, ECLI:NL:RBGEL:2016:4868, ruled on the validity of an agreement in a franchise agreement, whereby disputes would be settled

By Alex Dolphijn|19-05-2017|Categories: Dispute settlement, Franchise Agreements, Statements & current affairs|Tags: , |
Go to Top