Last year, I acted for a franchisee who was most concerned about the expiry of the franchise term, and he received a letter from the franchisor stating that the duration of the franchise had expired and that the franchise agreement had been terminated. The duration of the deductible was 5 years and there was a renewal fee for 5 years. When I considered the right to a renewal clause in the franchise agreement, I found that there was a time frame for the franchisee to notify the franchisor of its intention to extend the franchise, and such notification should not be given more than 6 months and no less than 3 months before the end of the period. However, the clause contained the phrase “time must be essential,” which means that periods are very important and strictly enforced. Since the franchisee had forgotten to exercise its right of withdrawal and the franchisor did not like the franchisee and wanted to dismiss the franchisee, I informed the franchisee that nothing could be done because the franchisee had not met the deadline. Non-competition bans are extremely frequent and rightly so. In order to establish a franchise relationship and give franchisees access to the franchise system, it is essential that franchisors protect non-competition clauses. In cases where there is no possibility of renewal or where one of the parties is not certain to enter into a new franchise agreement, a franchisor may authorize the continuation of a franchise contract on foot on the basis of a holding-over contract. Some franchise agreements have an explicit holding-over mechanism, while other franchise agreements do not contain a holding-over mechanism and the parties instead choose to enter into a contract without agreement on the terms of the franchise agreement. Holding-over clauses are generally designed only as a stop measure to provide coverage for days or weeks, for example, in the event of a short delay. B when signing a new franchise agreement. The law in this area has been developed over a long period of time and is very specific on a case-by-case basis. The conditions under which the continued operation of the franchise is sanctioned depend on the conduct of the franchisor and the franchisee.
The franchisee can also negotiate with you the terms of the extension. You do not have to accept negotiation agreements. However, there is at the end of a franchise, which all franchisors must follow, there are binding commitments. This means that you must act reasonably and in good faith in your renewal decision. The code defines “extension” by a substantial change in the terms of an agreement (for example. (B) the rights of a person under the agreement and the commitments that would be imposed on a person within the framework or in relation to the agreement. On the other hand, franchisees sometimes want to renew their contract. How is a franchisee evaluated if they want to continue? The category exemption from the EU agreement provides that the restrictive agreements that can be implemented should not cover the entire territory allocated to the franchisee, but should be limited to the physical space from which contract goods or services were sold.