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
Column Franchise+ – mr. J. Sterk – “Franchisee does body check better than franchise check”
A gym embarks on a franchise concept that offers “Body Checks” and discounts to (potential) members in collaboration with health insurers.
Seminar Mrs. J. Sterk and M. Munnik – Thursday, November 2, 2017: “Important legal developments for franchisors”
Attorneys Jeroen Sterk and Maaike Munnik of Ludwig & Van Dam Advocaten will update you on the status of and developments surrounding the Dutch Franchise Code and the Acquisition Fraude Act.
Goodwill at end of franchise agreement
In a case before the Amsterdam Court of Appeal on 26 September 2017, ECLI:NL:GHAMS:2017:3900 (Seal & Go), a franchisee claimed compensation for goodwill (ex Article 7:308 of the Dutch Civil Code) after the
Article in Entrance: “Resignation”
Fire an employee who is not performing well? The subdistrict court is strict. If you, as an employer, cannot demonstrate that you have done everything yourself to make the person function better, it will be
Cost price that is too high as a hidden franchise fee
An interlocutory judgment of the District Court of The Hague dated 30 August 2017, ECLI:NL:RBDHA:2017:10597 (Happy Nurse) shows that the court has considered the question whether the
Supermarket letter – 19
Coop liability for damages due to non-performance towards the franchisee