As a manufacturer or supplier, you can make use of distributors, local agents or franchisees for marketing purposes. From a legal point of view, there are substantial differences between distribution, agency and franchise. Which form fits in the best with your own wishes and your specific situation?
Legal differences between distribution, agency and franchise
Distributors always act at their own expense and risk, but agents merely mediate in the formation of contracts in the manufacturer’s name and at their expense. Franchisees can use the franchiser’s franchise formula on payment of a fee.
Agency is provided for under the law. There are mandatory provisions with respect to commissions, and the way in which the relation with the agent may be terminated and under what conditions is also laid down by law. Since distribution and franchising are not provided for by law in the Netherlands, the parties have a considerable degree of freedom with respect to contracts. However, these contracts are limited by the general doctrine of contracts as well as by standards of reasonableness and fairness. For example, guidelines on termination of distribution agreements have been developed in case-law and the literature.
At Ploum, we can advise you on the best type of marketing to suit your specific situation. And we can also draw up the relevant agreements for you, or assess them for you if you so wish. We can help you if you have any questions on competition law as well, and we can assist you in altering and terminating your long-term relationships, resolving collaboration problems and conducting legal proceedings.