BoerenBond (a Dutch retail organisation for garden and pet products) as franchisee of Agri Retail ran 73 BoerenBond stores. In addition, Agri Retail had 25 more BoerenBond stores, run by other franchisees. The franchise agreement between Agri Retail and BoerenBond had been terminated in August 2013, but BoerenBond nevertheless continued to use the BoerenBond trade name and trademark. Agri Retail found this to be a violation of the franchise agreement, whereas BoerenBond argued that its use of the trade name and trademark was not based on the franchise agreement but rather on the fact that BoerenBond had been operating BoerenBond stores well before the franchising relationship started.
In weighing the interests of both parties, the Court found that denying BoerenBond the right to use the trade name and trademark during the unbundling of the franchise relationship, would cause BoerenBond irreparable damage. BoerenBond would have to change all its advertising and branding at high costs and the goodwill related to the BoerenBond stores would decrease. This damage may be unnecessary, as there is a chance that BoerenBond will in the end be entitled to continued use of the trade name and trademark through cooperation with another party that is also in the process of unbundling from Agri Retail. Furthermore, the unbundling negotiations might be adversely affected by denying BoerenBond the right to continue as before during the unbundling process. BoerenBond interests therefore outweigh Agri Retail’s interest to enforce its exclusive trade name and trademark rights and any problems Agri Retail might face due to its remaining BoerenBond franchisees having to compete with BoerenBond stores that are not part of the franchise network.
Although the facts and circumstances of this case are rather particular and the parties had a long history together, which certainly influenced the Court’s decision, this co-existence – albeit for a limited period of time – is highly unusual and can certainly be very detrimental to the franchisor and the value of its trademark and its position on the market.
Tessa de Mönnink , IDI franchising Country Expert for The Netherlands, and Micheline Don, De Grave De Mönnink Spliet Advocaten