Distribution & Franchising

Netherlands

At first sight it would appear that the activities of a distributor and a commercial agent have much in common. Even so, the statutory regulations that apply to distribution and agency agreements have essential differences. This affects not only the rights accruing to the contracting parties but also to the obligations resting on them. For this reason, it is important for you to know exactly what type of agreement you conclude and what consequences this may have for you.

CMS has many years of experience in this area. We guarantee you an agreement that is in accordance with all the applicable statutory provisions while at the same time fully safeguarding your interests. Furthermore, through the international CMS organisation we can provide you with expert assistance in concluding an agreement with a foreign party.

Franchising is a form of distribution that is being increasingly chosen by companies. Franchising combines independent enterprise for the franchisees with the opportunity to link up with and make use of a total concept devised and developed by the franchiser. At present there are about 650 franchise formulas in the Netherlands and this number is continuing to rise, particularly in the general and business service sectors.

Uniformity in the formula is vitally important. The formula ensures recognition among consumers and customers, and offers the opportunity to achieve economies of scale through joint purchasing, advertising, automation etc.

Franchising is a contract not referred to in law, containing elements of various agreements such as purchase, licence and leases as well as forms of finance, and in which competition law also plays an important restricting role in the franchise relationship. The franchise relationship is therefore governed by a number of statutory rules with a specific franchise interpretation.

CMS has built up many years of experience, both nationally and internationally, in franchising practice within its organization, and also wide experience in drawing up and amending franchise contracts and supervising the start and changes within franchise organizations. We also act as intermediaries and conduct litigation in disputes between the franchiser and franchisee.

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