Termination or dissolution of the franchise agreement by the franchisee

In principle, franchise agreements can be terminated prematurely, for example by cancellation or dissolution. On 21 March 2018, the District Court of Overijssel, ECLI:NL:RBOVE:2018:1335, ruled on the question whether a franchisee had validly terminated the franchise agreement prematurely. 

The franchisor had wanted to use summary proceedings to ensure that the cooperation between the parties would be resumed immediately, now that the franchisee had discontinued it. The franchise agreement contained rules about early termination. However, the franchisee had not signed the franchise agreement and in the context of the preliminary relief proceedings the court disregarded the provisions of the franchise agreement. It has been established, however, that the parties had in any case concluded an (oral) continuing performance contract. 

The franchisee had already indicated to the franchisor for some time that he wished to terminate the franchise agreement as soon as possible. Instead of terminating the franchise agreement, the franchisee had terminated the franchise agreement. However, the franchisee had not sufficiently substantiated and substantiated that the franchisor had failed. It had therefore not become plausible that it was justified to terminate the franchise agreements. 

Since the franchisee had not terminated the franchise agreement, which may under certain circumstances be possible to terminate, and the dissolution was not legally valid, the (verbally) concluded franchise agreement must be complied with. 

mr. AW Dolphijn – franchise lawyer 

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .

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