Making changes by the franchisee to the

In addition to a franchise agreement, the franchisee has often also concluded a rental agreement with the franchisor. Usually there is a (sub)lease agreement, whereby the franchisor as lessor and the franchisee as lessee have concluded the lease. It is also possible that the franchisee has concluded a rental agreement with another (legal) person. In the present case, it will be assumed that a rental agreement has been concluded with the franchisor, whereby the franchisor, as the lessor/sub-lessor, enters into the rental agreement with the franchisee as the lessee/sub-tenant. In this context, a specific subject with regard to the rental relationship between the parties will be discussed in more detail, namely the making of changes by the franchisee to the rented property.

In short, Article 7:215 of the Dutch Civil Code stipulates that the tenant (hereinafter: franchisee) is not authorized to change the layout or appearance of the rented property in whole or in part without written permission from the lessor (hereinafter: franchisor), unless it concerns changes and additions that can be undone and removed at the end of the rental without significant costs. The foregoing means that no permission needs to be requested for a small category of simple activities. This category relates to, for example, the installation of wall mirrors and curtain rails, etc.

For other changes, the franchisee does require permission from the franchisor. If the franchisor refuses permission, the franchisee can demand that the court authorize him to make the changes he wants. The court will only allow the claim if the changes are necessary for the effective use of the leased property by the franchisee and if no serious objections on the part of the franchisor oppose the application of the relevant changes. A serious objection exists, for example, if the expected decrease in value of the leased property as a result of a faulty construction or due to its unsightly nature can be expected. The court may also attach conditions to the authorization. These conditions may relate to the fact that the franchisee will be responsible for the full maintenance of the installed facilities or the obligation to remove the facility at the end of the lease. Another condition that can be imposed is, for example, the condition that the change must be made by a recognized contractor or according to a construction plan approved by the franchisor.
Franchisors and franchisees are advised to immediately make agreements in the event of changes about whether or not these changes will be removed at the end of the rental agreement. It is also advisable to make agreements about this prior to the conclusion of the rental agreement.

Ludwig & Van Dam franchise attorneys, franchise legal advice