The forced alternative franchise formula (Kippersluis/Jumbo)

The Den Bosch Court of Appeal ruled on the issue of a franchisee, referred to as Kippersluis, against Super de Boer (now Jumbo). Two judgments of 22 September 2015 (ECLI:NL:GHARL:2015:6591 and ECLI:NL:GHARL:2015:6582) seem to have put a provisional end to a long-running issue about whether the Super De Boer franchisee At the end of the formula, it was obliged to switch to another formula and was allowed to continue to operate a supermarket under its own name in the (sub)rented business space.

Super De Boer had put considerable pressure on the franchisee to switch to the C1000 formula and, when that did not lead to any results, terminated the cooperation agreement with the franchisee. The Super De Boer formula would disappear from the market. From the moment it became known that Super de Boer would disappear from the market, the franchisee has always requested to be allowed to become a Jumbo supermarket, which Super De Boer had categorically refused.  The franchisee then started operating the supermarket under his own name.

Only later, when Jumbo had become the owner of Super De Boer, did Super De Boer change its mind and request the franchisee to cooperate in undoing the cancellation/termination of the cooperation agreement and, in that context, to offer the Jumbo formula after all. However, the franchisee refused.

Jumbo demanded that the franchisee still enter the Jumbo formula. According to the Court of Appeal, Jumbo has not provided sufficient facts and circumstances that are so compelling that they should mean that the franchisee was obliged to agree to the continuation of the cooperation with Super De Boer and to a takeover by Jumbo. Moreover, it is not improbable that the franchisee had already incurred costs for preparation and implementation for the continuation of the supermarket under its own name. The conclusion is therefore that the franchisee was not contractually or extra-contractually obliged to accept the Jumbo formula offered.

Because the main lease agreement between the property owner and Super De Boer stipulated that the rented property could only be used by a Super De Boer franchisee, the property owner demanded that the property be evicted by Super De Boer. Super De Boer in turn demanded that the leased premises be evicted by the franchisee who operated the supermarket under his own name. Although the eviction of the main lease was granted, the property owner and Super De Boer/Jumbo subsequently concluded a new lease. The last claim, the eviction by the franchisee as a subtenant, is rejected, partly in view of the fact that the franchisee was not obliged to opt for an imposed C1000 or Jumbo formula.

The sublease agreement with the franchisee was terminated by Super De Boer, invoking urgent own use. At first instance, this appeal succeeds. The subdistrict court has set an amount of € 50,000 as an allowance for the relocation and furnishing costs, on the condition that Kippersluis relocates its company within a certain radius within 12 months after the eviction. This judgment does not hold up on appeal  that Jumbo has successfully indicated that the franchisee has committed fraud under the Super De Boer formula. The dissolution of the rental agreement is therefore justified instead of termination due to urgent personal use. This means that the relocation and furnishing costs of € 50,000 have been wrongly paid to the franchisee and must be repaid to Jumbo.

The conclusion is that the franchisee, despite the fact that he is not obliged to implement an alternative formula that has been forced upon him, can sometimes still be outplayed. The battle for a supermarket location is sometimes fierce and requires shrewd anticipation of the game of chess being played.

mr. AW Dolphijn – Franchise lawyer

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