No valid appeal to non-compete clause in franchising
On 28 February 2017, ECLI:NL:RBGEL:2017:1469, the provisional relief judge of the District Court of Gelderland ruled on whether a franchisee could be bound by a non-compete clause.
The preliminary relief judge ruled that the franchisor could not invoke the non-compete clause in the franchise agreement, given the circumstances of the case. The issue was that the retail premises rented from the franchisor had to make way for housing. In anticipation of new business premises to be rented from the franchisor, the franchisee (temporarily) operated a business under his own name. It was uncertain whether the franchisor would still be able to offer (suitable) business premises to continue the collaboration. In view of this uncertain situation, the interest of the franchisee in keeping his new store open outweighs the interest of the franchisor in the opinion of the preliminary relief judge.
If during or after the end of a franchise agreement there is uncertainty about the continuation of the cooperation, this could possibly (also, or more specifically) be assessed as an unforeseen circumstance (ex Article 6:258 of the Dutch Civil Code). To put an end to the uncertain situation, both parties could also (together) energetically turn to the (provisional) judge to come to an adjustment and/or interpretation of the existing agreements. A conflict situation could then perhaps be avoided.
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
Franchisor fails by invoking a non-compete clause
Although a non-compete clause is validly formulated in a franchise agreement, a situation may arise that is so diffuse that the franchisor cannot invoke it.
Acquisitions and Franchise Interest
It will not have escaped anyone's attention, certainly in the last year it can only be concluded that the Dutch economy is once again on the rise.
Which court for a rental and franchise agreement?
Which court is competent to rule on a related rental and franchise agreement?
Interview Franchise+ – mrs. J. Sterk and AW Dolphijn – “Reversal burden of proof in forecasts honored by court”
The new Acquisition Fraud Act indeed appears to be relevant for the franchise industry, according to this article from Franchise+.
Franchisor convicted under the Acquisition Fraud Act
For the first time, a court has ruled, with reference to the Acquisition Fraud Act, that if a franchisee claims that the franchisor has presented an unsatisfactory prognosis
Agreements Related to the Franchise Agreement
On 31 October 2017, the Arnhem-Leeuwarden Court of Appeal issued similar judgments for nineteen franchisees (ECLI:NL:GHARL:2017:9453 through ECLI:NL:GHARL:2017:9472).