Last week, 23 May 2018, the Dutch Secretary of State of Economic Affairs and Climate, Mrs. Mona Keijzer, announced in a letter (in Dutch) to the Parliament that a new draft bill on franchise will be published this Autumn. Herewith she follows up on the promise of the new government, as stated in the Coalition Agreement (page 35, in Dutch), to enact legislation on franchise in order to strenghten the position of franchisees in the “precompetitive phase”. Earlier this year during a debate with the Parliament, Keijzer stated she doesn’t favour the legal anchoring of the Dutch Franchise Code (page 32 Summary of the meeting, in Dutch, see also KVdL news).
What will be regulated?
Again affirmed in her letter to the Parliament, the legal anchoring of the Dutch Franchise Code, selfregulation that stirred up a lot of dust in the industry is off the hook. With this statement Keijzer definitely buries the legislative proposal of the former Minister of Economic Affairs, Mr. Kamp. Keijzer plans to launch a new legislative proposal which will provide a framework for four areas in the relation between franchisors and franchisees: 1) precontractual exchange of information, 2) amendments during the term of franchise agreements, 3) termination of the franchise cooperation, and 4) the consultation meeting between franchisors and his franchisees.
Precompetitive or precontractual?
Apart from mentioning the four topics, the letter does not give a further explanation. In the abovementioned debate Keijzer announced, that she will prepare a new legislative proposal for the “precompetitive phase” in the form of a general administrative regulation. It was generally assumed she meant “precontractual” instead of “precompetitive”. Interestingly enough, the coalition agreement of the political parties when they formed the current government also used the term “precompetitive phase”. It is now clear that Keijzer plans to go beyond regulating the precontractual phase. It is as yet unclear to what extent these four topics will be substantively elaborated in statutory provisions, or that the statutory provisions will be much shorter and only provide the legal basis for a general administrative regulation. The latter does not have to be prior approved by Parliament (subject to the right of amendment) and the Senate. While the letter does not shed any light on this, it is clear that that if she would opt for such a proposal it will probably elicit the same critic regarding lack of democratic legitimacy as the previous draft bill of Mr Kamp.
Next steps?
Keijzer sees herself faced with the challenge to “offer effective protection where necessary to tackle undue commercial practices,” she states in her letter. She underlines the importance of a balanced franchise relation: “Simultaneously, I want to give maximum space to the cooperation between entrepreneurs where this serves the interests of all stakeholders in a balanced manner. This touches upon different areas of law and important economic interests.” After the summer the legislative proposal will be published, after which a consultation round will start.
More on information on actual developments in the area of franchise, distribution and agency, please contact Martine de Koning, partner and attorney at law of the practice group Commercial & International Trade.
