Purchase obligation and competitive prices
On 9 September 2015, the District Court of the Northern Netherlands (ECLI:NL:RBNNE:2015:4271) rendered a judgment on the question of whether a franchisor charged market prices in the case of an exclusive purchasing obligation.
Franchisees accuse the franchisor of misusing the prescribed purchase obligation because prices were not charged in line with the market. The franchise agreement prescribes that the prices must be in line with the market.
The court concludes that the franchisees have not sufficiently substantiated that the franchisor charged them prices that were not in line with the market. The mere fact that other suppliers had cheaper prices at different times (and usually for a limited number of products) is not sufficient for this. It cannot in any way be deduced from the statements of the franchisees that other suppliers could continuously supply all franchisees at those lower prices, according to the opinion.
Since, according to the court, the franchisees have not provided sufficient evidence to conclude that the franchisor has not supplied at market prices, there is no reason to allow them to provide further evidence. The opening of books requested by the franchisees is therefore also not ordered. Incidentally, the court also notes that the franchisees have not made it sufficiently clear why disclosure could contribute to relevant evidence. After all, the prices charged by the franchisor to the franchisees are known and the possibilities and prices of other providers will not be found in the books of the franchisor.
The claimed liability of the (indirect) directors and/or shareholders of the franchisor are also rejected in line with the foregoing.
Once again it appears that strict requirements are imposed on the substantiation of the statement that there are no market-based prices in the case of exclusive purchasing obligations.
Mr AW Dolphijn – Franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Mail to dolphijn@ludwigvandam.nl
Other messages
Article Franchise & Law No. 7 – Franchise agreement as general terms and conditions
Uniformity of the franchise formula and (therefore also) uniformity of the agreements with the franchisees will often be of great importance to the franchisor.
The franchisee’s customer base
If the partnership between a franchisee and a franchisor ends, the question of who will continue to serve the customers may arise.
The healthcare franchisor is not a healthcare provider
The Healthcare Quality, Complaints and Disputes Act (WKKGZ) creates the possibility of government measures being imposed on healthcare institutions to guarantee the required quality of healthcare.
The restructuring within the Intergamma formats from a legal perspective
The legal reality is sometimes more unruly than the factual. The controversial issue at Intergamma is a good example of this.
Open vacancy: lawyer-employee and/or lawyer-trainee!
Due to the departure of one of our colleagues, we are looking for a new lawyer-employee or lawyer-trainee. Interested?
Non-compete clause on the sale of a franchise business
How strict should a non-compete clause be when selling a franchise business to the franchisor? This question was raised in a dispute in which the District Court of Gelderland op