The Franchise Act was adopted by the House of Representatives on 16 June 2020. The
\n The main points of the bill include the following: <\/p>\n
\n 1. The recruitment of franchisees<\/u>
\n \n<\/p>\n
\n The draft Franchise Act requires franchisors to recruit
\n of franchisees to provide all relevant information. A
\n there is no such hard rule now. As a franchisee with
\n has disappointing results, a discussion may arise or
\n the franchisor must provide all relevant information to the franchisor in advance
\n franchisee and should not have been at risk
\n ways. The concept of the Franchise Act aims to prevent that
\n franchisees are insufficiently informed by franchisors.
\n \n<\/p>\n
\n It will be of great importance to the franchisor and the franchisee
\n properly document which questions they have asked back and forth and on
\n which way they are answered. Disagreement about this is a source of
\n conflict. That will be the commercial aspects of the recruitment and negotiation
\n not always relaxed.
\n \n<\/p>\n
\n 2. The cooling-off period for the aspiring franchisee<\/u>
\n \n<\/p>\n
\n For providing the information when entering into a
\n franchise agreement will soon apply. Four weeks prior to
\n the conclusion of a franchise agreement should contain all possible relevant
\n information has been communicated to the prospective franchisee. Within that
\n period, the proposed cooperation may not be changed. So there is allowed
\n no (other) agreement can be concluded between the parties. The target
\n of the proposed rule is to create a cooling-off period. With that
\n the entrepreneur is given the time and the peace to consider the offer carefully.
\n Not only can so hasty and ill-considered decisions become
\n prevent, also time can be used to seek advice from
\n experts.
\n \n<\/p>\n
\n However, it is also conceivable that entrepreneurs do not always need a month
\n to make a good decision. Sometimes speed is required, for example
\n because people are also in the race to rent a retail property. The aspiring
\n The franchisee must then be able to act decisively with the franchisor
\n act together to ensure that the race to rent it
\n retail property is won, but in that race it is also clear what the
\n agreements between franchisee and franchisor. Duty one
\n observing the cooling-off period may therefore be at the expense of obtaining
\n a good location. Then it is only detrimental to the parties
\n during that period you are not allowed to do anything at all.
\n \n<\/p>\n
\n 3. Prospective franchisee must conduct research (or have it done).<\/u>
\n \n<\/p>\n
\n The bill emphasizes personal responsibility
\n of the prospective franchisee to ensure that he has passed all the
\n franchisor properly understands the information provided.
\n \n<\/p>\n
\n The franchisee is therefore almost obliged to pay all submitted de
\n to have contracts legally screened. Aspiring franchisees should
\n should use this reflection period to, for example, make financial estimates
\n to calculate properly and to be well informed about
\n liability risks. Franchise agreements are for non-attorneys
\n moreover, often difficult to read, so that franchisees only realize afterwards
\n realize what they are committed to. Unfortunately, we’re getting into this
\n practice a lot. A franchisor is also faced with such a situation
\n of course not waiting.
\n \n<\/p>\n
\n 4. Mandatory Assistance by the Franchisor<\/u>
\n \n<\/p>\n
\n The franchisor is obliged to provide assistance as well as commercial and
\n technical support’ to the franchisee. Granting
\n assistance may consist of providing support to the franchisee
\n through continued commercial and technical assistance by the franchisor
\n to achieve a win-win situation. This obligation can be indicated
\n as a duty of care of the franchisor and could be all the more onerous
\n as the franchisee’s dependence on the
\n franchisor is greater.
\n \n<\/p>\n
\n The proposed regulation aims to promote a win-win situation. It
\n transfer of knowledge and skills by the franchisor to create a win-win situation
\n to achieve and maintain is of course an important starting point
\n franchising.
\n \n<\/p>\n
\n 5. Right of Consent of Franchisees<\/u>
\n \n<\/p>\n
\n Franchisees are given a certain right of consent. The bill
\n stipulates that changes that the franchisor wants to make and that
\n potentially significant impact on the franchisee’s operation
\n may only be made with the consent of the franchisee
\n implemented. It happens with almost all formulas that periodically the
\n house style changes, investments in software and inventory are required,
\n or that other measures are prescribed by the franchisor.
\n On the other hand, it is a unilateral sudden increase of the franchise fee, without
\n valid reason, of course not something that should just be possible.
\n \n<\/p>\n
\n If franchisees unite, the proposed arrangement will offer better
\n means to arm oneself against the implementation of undesirables
\n amendments. On the other hand, the right of consent can also be paralyzing
\n innovation of the formula works, especially in the case of one
\n conflict situation.
\n \n<\/p>\n
\n 6. No competing formula, without permission<\/u>
\n \n<\/p>\n
\n In principle, the franchisor will not be allowed to operate any other formula that
\n wholly or largely corresponds to the franchise formula that the
\n operating franchisees. This requires the consent of the franchisees
\n required.
\n \n<\/p>\n
\n Franchisees don’t get very excited when the franchisor has a
\n exploit another formula that may compete with the existing one
\n formula. However, there may also be advantages for franchisees involved
\n such as economies of scale and reduction of purchase prices. Fits here then
\n also advanced reasoning.
\n \n<\/p>\n
\n
\n 7. Restriction of the prohibition of competition after the end of the cooperation
\n <\/u>
\n \n<\/p>\n
\n A prohibition on competition after the end of the cooperation is only possible
\n if it has been agreed in writing, if the know-how of the
\n franchisor is limited to one year after the end of the
\n cooperation and limited to the franchisee’s area of \u200b\u200boperation such as that
\n applied under the franchise agreement.
\n \n<\/p>\n
\n 8. More emphasis on good agreement goodwill<\/u>
\n \n<\/p>\n
\n There will be rules about the franchise business and the end of the
\n franchise agreement. Sometimes in practice there is no appointment at all
\n about goodwill. Once a franchisee has built up a customer base,
\n but after the end of the franchise agreement, this customer base no longer exists
\n is allowed to use, then the question is how to deal with this. The
\n franchisor can take advantage of this by taking advantage of this
\n built customer base. The franchisor may further believe that
\n the customers are not connected to the franchisee, but to the formula.
\n \n<\/p>\n
\n According to Ludwig & Van Dam attorneys, it is good that there is an incentive
\n is given to think in advance about what will be at the end of the
\n franchise agreement will apply. The same goes for how to deal with
\n any claims to goodwill.
\n \n<\/p>\n
\n 9. Mandatory consultation between franchisee and franchisor<\/u>
\n \n<\/p>\n
\n The law also says that franchisors and franchisees must at least once a
\n discussing cooperation for years. Now there is no legal one
\n consultation obligation. It is not clear who should take the initiative for the consultation
\n determined exactly, but it seems that at least the franchisor
\n must make sufficient efforts to negotiate with the franchisee
\n to go. A legal obligation to consult will in any case be one
\n be an incentive to sit down with each other periodically. All for this
\n the points mentioned could be discussed during the consultations to be held.
\n \n<\/p>\n
\n It should be the intention of the franchisee and franchisor to
\n conducting consultations does not only remove misunderstandings and disagreements
\n to leave, but above all also to creatively investigate how the collaboration
\n can lead to even greater success. A legal consultation obligation will
\n can contribute to this. On the other hand, there is also a danger in the
\n regulations. With the legal provisions at the ready, may differ
\n of insight may also escalate more easily if the intended consultation does not
\n leads to solutions.
\n \n<\/p>\n
\n To the Senate<\/u>
\n \n<\/p>\n
\n After approval by the House of Representatives, there is no law yet. The bill
\n will be forwarded to the Senate. The Senate will surrender
\n bend the proposal and possibly make changes and nuances. If
\n the bill has also been accepted in the Senate, it goes to it
\n Cabinet of the King for signature by the King and publication in
\n the Official Gazette.<\/p>\n
<\/p>\n
mr. AW Dolphijn – franchise lawyer <\/p>\n