Qualification of renting industrial premises and its consequences

Under the new tenancy law, it is clearer than before when there is a question of renting industrial space and renting other space. This distinction is important when there is a link with the franchise agreement. If the franchisor independently rents space and in turn sublets it to the franchisee, there is a franchise agreement and a sublease agreement between the franchisor and the franchisee. Ideally, these agreements are properly linked to avoid different terms or non-simultaneous termination. If there is a lease of business space within the meaning of Article 7:290 paragraph 2 of the Dutch Civil Code, the main statutory rule applies that, subject to exceptions, the business space must be made available for two times five years. In that case, it is advisable to construct a relevant link to the franchise agreement in that sense.
In that case, it is important to first determine whether such business premises or other business space are involved. Examples of retail business premises include a hairdresser, kiosk, station restaurant, textile store, and video store.

Doubtful is a pharmacy and a showroom.

Other business premises, where in principle the main rule of term protection of two times five years is not present and therefore a fundamentally different link to the franchise agreement must be made are a beauty salon, a fitness center and a bicycle shed.

It is very important to carefully determine in advance when there is business space of a retail company or other space. Partly depending on the correct qualification, an adequate rental link must then be constructed between the relevant (sub)lease agreement and the franchise agreement. Careful consideration in advance prevents surprises during (premature) termination and settlement.

Ludwig & Van Dam franchise attorneys, franchise legal advice