Minister Kamp of Economic Affairs is looking into the possibility of enshrining the Dutch Franchise Code in the law. This is stated in a letter he has written to the Dutch House of Representatives. It means the Franchise Code may come to play a role in legal proceedings involving franchise disputes.
Reasons
The reason behind this statutory basis is an increase in the number of disputes between franchisors and franchisees that are being brought before the courts. This includes – for example – disputes regarding unfair competition, the division of the income or unilateral changes in the formula. The Franchise Code is intended to lead to less inequality in the balance of power between the parties. The Minister attaches great importance to compliance with the Code and is therefore looking into the possibilities of providing a legal deterrent.
Content of the Dutch Franchise Code
The Dutch Franchise Code describes how parties should behave when entering into, performing and terminating a franchise agreement. In addition, the Minister wishes to support the sector in setting up a disputes committee. The idea behind this is that the parties themselves have the greatest understanding of the nature and extent of a dispute. It will enable franchisers and franchisees to find a fitting solution themselves, before the court has to get involved.
Influence of the code on new franchise agreements
Franchise agreements that are entered into or extended after implementation of the Dutch Franchise Code must meet the requirements of the Code. For existing franchise agreements, the Code will serve as a guideline in assessing the behaviour of the parties.
If you have a question about this subject, you can contact Bouwe Bos.
