On October 10, 2019, the District Court of East Brabant, ELCI:NL:RBOBR:2019:5859
\ndecides that a franchisee in the event of premature termination of the
\nfranchise agreement was nevertheless bound by it
\nnon-competition.<\/p>\n
The franchisee did not achieve the turnover forecasts and blamed the
\nfranchisor that the franchise system is dysfunctional, her an incorrect one
\nrepresentation of the situation has been predicted prior to the conclusion of the contract
\nfranchise agreement and the franchisor has acted unlawfully
\nby painting an overly rosy picture in that context. The franchisee
\ntherefore demanded from the court that she would no longer be held liable for the time being
\ncomply with the obligations under the franchise agreement, including the
\nnon-competition clause, until it is definitively established that the
\nfranchise agreement would have been formed in an invalid manner.
\nThe franchisee also argued that the franchisor had no interest
\nwould have if the prohibition of competition were maintained, because the
\nfranchisee has not built up a network within the franchise organization and
\nhardly any knowledge and know-how would have been transferred either
\nenjoy protection. The franchisee complains that they are considered small
\nentrepreneur is made financially impossible for the franchise organization
\nto leave and is therefore stuck.<\/p>\n
\nThe court rules that according to settled case law, the nature of the
\nfranchise agreement entails that the franchisor
\nhas an obligation to ensure that the to a future
\nfranchisee provided forecast is sound. The franchisor serves
\nto guarantee the correctness of the data that contribute to the forecast
\nunderlying. If a franchisee fails to
\noperation of its business, as budgeted in the forecast
\nand moreover it is established that the franchisor does not have
\nensured a proper prognosis, the franchisor is in principle
\nliable for damages. The mere fact that the achieved result of a
\nfranchisee is lower than forecast by the franchisor
\ndoes not mean that the prognosis is unsatisfactory. An incorrect prognosis can
\ntherefore only provide grounds for undermining the right to exist of the
\nfranchise agreement if circumstances arise that of
\ndeviate from the aforementioned principles. The court rules that
\nprovision of false factual information by the franchisor
\nprior to the conclusion of the franchise agreement
\nor at least that has not proven to be the case. Also from one
\nnon-performance by the franchisor has also not been proven. being judged
\ntherefore that the franchise agreement will still exist and that
\ntherefore the non-compete clause is also valid. The interest in the
\nfranchisor of compliance with the prohibition of competition by the
\nfranchisee has become sufficiently clear now the franchisor
\nhas demonstrated that important trade secrets have been shared with the
\nfranchisee.\n<\/p>\n
\nIn this case, the franchisee simply had to comply with the franchise agreement
\nincluding the non-competition clause. What is striking about this statement is
\nthat no appeal appears to have been made to the Acquisition Fraud Act. This
\ndoctrine seems to narrow the position of a franchisee considerably
\ncan relieve.\n<\/p>\n<\/p>\n
<\/p>\n
mr. AW Dolphijn \u2013 franchise lawyer\n<\/p>\n
\nLudwig & Van Dam Franchise attorneys, franchise legal advice. Want
\nyou respond? <\/p>\n