Proven formula for success – a sequel
Unfortunately, in recent months it has become increasingly common for franchisees to run into problems as a result of, in short, a franchise formula that looked good on paper, but turned out not to work in practice. This often concerns small franchise organizations in the start-up phase, usually already in the first year of their existence. The cause of the problems can often be found in the fact that the franchisor in question has either just started in the sector or has been working in it for some time, but has no experience with franchising. Through their own entrepreneurship, and perhaps a dose of luck, the involved franchisor manages to set up and maintain his own company, but the franchisees are often confronted with a concept that does not work at all linked to their person. This translates into virtually no turnover and substantial losses.
The European Code of Honor on Franchising, a code of conduct to which all franchisors affiliated with the Dutch Franchise Association must adhere, but of which it is highly recommended that non-members also follow the instructions therein, stipulates that before a concept or formula is is offered to franchisees through franchise agreements, there must be a proven formula for success, and therefore a track record. That track record can be achieved, for example, by operating a pilot store for a longer period of time, a pilot project as it were, which can be used to determine whether the concept can actually function, independently of the person of the franchisor. In that case there can be a proven formula for success and only then can setbacks as referred to above, often with very far-reaching negative consequences for the franchisees, but also for the franchisor, be prevented.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Bankrupt because the franchisor refused to sell the franchise company – dated January 28, 2020 – mr. AW Dolphin
The District Court of The Hague has dealt with a request from a franchisor to declare a franchisee bankrupt.
Prescribed shop fitting – dated January 28, 2020 – mr. AW Dolphin
The Midden-Nederland District Court has ruled on whether a franchisee is obliged to carry the shop fittings prescribed by the franchisor.
Ludwig & Van Dam attorneys summon Sandd and PostNL on behalf of the Sandd franchisees – dated 9 January 2020 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) has today summoned Sandd and PostNL before the court in Arnhem. The VFS believes that Sandd and PostNL are letting the franchisees down hard.
Article The National Franchise Guide: “Why joint and several liability, for example, next to private?” – dated 7 January 2020 – mr. AW Dolphin
Franchisees are often asked to co-sign the franchise agreement in addition to their franchise, for example. Sometimes franchisees refuse to do so and the franchise agreement is not signed.
Ludwig & Van Dam Advocaten assists Sandd franchisees: Franchisees Sandd challenge postal monopoly in court – dated 12 November 2019 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) is challenging the decision of State Secretary Mona Keijzer to approve the postal merger between PostNL and Sandd before the court in Rotterdam.
Franchisee trapped by non-compete clause? – dated October 21, 2019 – mr. AW Dolphin
The District Court of East Brabant has ruled that a franchisee was still bound by the non-competition clause in the event of premature termination of the franchise agreement.