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
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).