Update: 27-08-2020
On Tuesday 23 June 2020, the Dutch Senate dealt with the proposed Franchise Act in a procedural session. The Senate decided not to proceed to a debate on the substance of the Franchise Act. Following this, the Franchise Act was adopted by the Senate on 30 June 2020 in the form that was passed by the House of Representatives. The Franchise Act will enter into force on 1 January 2021. For franchise agreements concluded before that date, a transition period of two years applies to comply with the statutory requirements on goodwill/non-compete and on prior consent.
- The article on goodwill states that the franchise agreement must determine how goodwill, if any, will be determined and in what way goodwill attributable to the franchisee will be paid if and when the franchisor takes over the operation of the franchise business ( or when that take over is temporary in order to transfer the business to a new franchisee).
- Prior consent by a majority of the franchisees (or all franchisees that are affected by the change) established in The Netherlands must be obtained by the franchisor if he plans to – without changing the franchise agreement – make changes to the franchise concept or plans to operate (including indirectly) a derivative concept, where the investment (including additional costs, fees or reasonably expected loss of revenue) required from franchisees exceeds a prior agreed threshold. Amending a franchise agreement would generally require consent of the franchisee as the contracting party but the statutory rule aims to restrict the use of clauses in the agreement allowing the franchisor to make unilateral changes to the franchise agreement or franchise concept.
Read our articles on the Franchise Act here.
