Not a franchise agreement, but a general cooperation agreement

The Franchise Act offers franchisees various protective provisions. Earlier, the District Court of Amsterdam ruled on 24 May 2023, ECLI:NL:RBAMS:2023:4851, that car dealers affiliated with Stellantis do not fall under the Franchise Act. It was judged that there was insufficient evidence that a fee was paid that could be qualified as a fee for the use of a franchise formula. The car dealers are therefore not protected by the rules of the Franchise Act.

In a judgment of the Court of Central Netherlands, 14 June 2023, ECLI:NL:RBMNE:2023:2822, it was also ruled that there was no franchise agreement. This ruling also concerned cooperation in the automotive industry. The two warring parties mediate (separately from each other) in the conclusion of lease agreements for cars. They form the link between companies or consumers who want to lease a car on the one hand and the financial institutions that provide credit for the lease car on the other. A commission is received from the financial institution if a lease agreement is concluded after the brokerage activities have been carried out.

The aim of the cooperation between the parties was that they would jointly look for new customers for whom they could mediate in the formation of lease agreements. In this way they could submit applications on a large(r) scale to the financial institutions. They would do this under the name of one of the parties, acting as plaintiff in the proceedings. As a result, they would receive higher commissions than if they both brokered exclusively under their own name. In addition to this cooperation, both parties would each continue to serve their (then) own customers in their own name.

The claimant claimed, among other things, compliance with the non-competition clause in the agreement concluded with the defendant. The defendant argued, inter alia, that it offers protection under the Franchise Act, because the cooperation would qualify as a franchise agreement.

The court ruled that it has not been shown that the claimant has a franchise formula. It may have a trade name and know-how, but that alone is not enough. In addition, it does not appear that the defendant paid compensation to the plaintiff for the use of any franchise formula. It is also important that the defendant mediated in its own way and in its own name between customers and financial institutions in the formation of lease agreements and therefore did not do so in a manner indicated by the plaintiff. In short: there is no question of a franchise agreement in this case either.

mr. A.W. Dolphijn
Ludwig & Van Dam lawyers, franchise legal advice.
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