Recognize qualitative obligations with a business premises franchisee in a timely manner
Court of Haarlem
The court in ‘s-Hertogenbosch was recently confronted with the following case against a municipality. At some point, the claimant (buyer) purchased a business premises in which a supermarket was operated until shortly before the date of delivery. This supermarket has moved to a larger business premises.
A qualitative obligation has been agreed for the seller, which, in short, means that the buyer may not use the purchased business premises to sell foodstuffs. A qualitative obligation has been agreed for the municipality, which – in short – means that the buyer may not use the purchased business premises for retail, unless it concerns the trade in musical instruments and electronics.
The buyer has ceased its business activities at any time and wishes to be released from the aforementioned qualitative obligations. In a previous judgment, the court in ‘s-Hertogenbosch ruled that the buyer was not (any longer) bound by the qualitative obligation towards the seller. In the present proceedings, the buyer wishes a declaratory judgment that the qualitative obligation towards the municipality has been dissolved. For example, the obligation would be in conflict with the zoning plan of the municipality itself (retail trade) and the obligation would have the consequence that competition is unlawfully distorted.
According to the court, a court can only grant such a claim for dissolution if at least ten years have passed since the conclusion of the agreement and continuing the obligations unchanged is contrary to the public interest. There must also no longer be a reasonable interest for the other party and it must not be plausible that this interest will (ever) return.
Although it has been established that the obligation results in acts contrary to the zoning plan, this does not mean that the court assumes that there is a conflict with the public interest. The fact that competition would be unlawfully distorted is not substantiated by the buyer (plaintiff). The court is also of the opinion that the municipality does indeed have a reasonable interest in enforcing the qualitative obligation, so that the claim is rejected.
The above shows all the more how (heavy) qualitative obligations can weigh on a party, even a long time after the agreement containing the obligation has been signed. Now that such obligations occur frequently, including in franchise relationships, it is therefore of the utmost importance to recognize such obligations at an early stage (read: before signing the agreement in question) and – where necessary – to identify what the consequences may be of the obligations.
Mr JH Kolenbrander – Franchise attorney
Ludwig & Van Dam Franchise attorneys, franchise legal advice Would you like to respond? Mail to info@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).