The exclusive catchment area and the exclusive delivery

On 20 April 2016, the District Court of Amsterdam (ECLI:NL:RBAMS:2016:2360) ruled on the question whether a franchisor could have allowed competitive activities in the exclusive territory of a franchisee. Another issue was whether the franchisor was allowed to supply a nearby competitor.

The franchisor operates a large industrial bakery and various franchise formulas, including “Bakkerij ‘t Stoepje” (hereinafter: ‘t Stoepje). The franchisee operates the formula ‘t Stoepje, among other things from a market stall on the Wednesday market in a certain place.

Another entrepreneur, initially under a different formula from the franchisor and later under his own name, operated the same type of market stall and on the same Wednesday market. A license had been issued for both to trade in cakes, bread and pastries on the same Wednesday market. The franchisee took action against the franchisor, as well as against the other entrepreneur, because he was in competition and the franchisee considered this unacceptable.

The court notes that in the (standard) agreements that exclusive areas explicitly do not apply to markets. Moreover, it was not operated according to the same formula. The court further rules that if the duty of care requires the franchisor to ensure that a forgiven exclusive territory must be respected, then it has not been argued that the franchisor should not be allowed to sell its merchandise to a non-franchisee. The question is therefore whether the franchisor’s duty of care also extends to the sale of its merchandise to a competing company located in the vicinity of the franchisee. The court did not answer this question because the franchisee had not made that accusation. If the franchisee had done so, it might have been considered that the franchisee has a point here. The cooperation in franchising aims to achieve a win-win situation. If the franchisor deliberately and directly places its merchandise with a direct competitor of the franchisee, it is not inconceivable that the franchisee will thereby act against the franchisor in violation of the purpose and intent of the franchise agreement.

mr. AW Dolphijn – Franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice.

Do you want to respond? Go to dolphijn@ludwigvandam.nl