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
Other messages
Bankrupt because the franchisor refused to sell the franchise company – dated January 28, 2020 – mr. AW Dolphin
The District Court of The Hague has dealt with a request from a franchisor to declare a franchisee bankrupt.
Prescribed shop fitting – dated January 28, 2020 – mr. AW Dolphin
The Midden-Nederland District Court has ruled on whether a franchisee is obliged to carry the shop fittings prescribed by the franchisor.
Ludwig & Van Dam attorneys summon Sandd and PostNL on behalf of the Sandd franchisees – dated 9 January 2020 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) has today summoned Sandd and PostNL before the court in Arnhem. The VFS believes that Sandd and PostNL are letting the franchisees down hard.
Article The National Franchise Guide: “Why joint and several liability, for example, next to private?” – dated 7 January 2020 – mr. AW Dolphin
Franchisees are often asked to co-sign the franchise agreement in addition to their franchise, for example. Sometimes franchisees refuse to do so and the franchise agreement is not signed.
Ludwig & Van Dam Advocaten assists Sandd franchisees: Franchisees Sandd challenge postal monopoly in court – dated 12 November 2019 – mr. AW Dolphin
The Association of Franchisees of Sandd (VFS) is challenging the decision of State Secretary Mona Keijzer to approve the postal merger between PostNL and Sandd before the court in Rotterdam.
Franchisee trapped by non-compete clause? – dated October 21, 2019 – mr. AW Dolphin
The District Court of East Brabant has ruled that a franchisee was still bound by the non-competition clause in the event of premature termination of the franchise agreement.