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Noerr PartGmbB | 23 Mar 2021

Do franchisors and franchisees still have to pay rent during a government-ordered shutdown?

The effects of the COVID-19 pandemic are still omnipresent in Germany. The courts have yet to resolve some legal issues, including the issue of payment of commercial rent. One example is whether franchisees and franchisors as tenants can reduce or even suspend their rent payments due to widespread government-ordered shutdowns. This article presents a brief summary of the current situation and......
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Noerr PartGmbB | Germany | 19 Mar 2021

Do tenants have to pay rent during a government-ordered shutdown?

The courts have yet to resolve some legal issues concerning the COVID-19 pandemic, including whether tenants can reduce or even suspend their rent payments due to widespread government-ordered shutdowns. More than 20 court decisions have been handed down on this subject, and the opinions expressed vary widely. Even the German law that entered into effect on 31 December 2020 via an expedited......
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Noerr PartGmbB | Germany | 22 Dec 2020

Appeals court finds clause allowing franchisor to unilaterally increase franchise fee to be invalid

The Jena Higher Regional Court recently held that a clause which allows a franchisor to adjust the franchise fee at the beginning of each quarter and does not clearly disclose to the franchisee the scope of the fee increase mechanism is in breach of the law regarding general terms and conditions, which applies to standard-form contracts and thus standardised franchise agreements. The decision......
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Noerr PartGmbB | Germany | 6 Oct 2020

What legal impact has the COVID-19 pandemic had on the franchise sector so far?

The COVID-19 pandemic continues to significantly affect the franchise sector, along with many others. In May and July 2020 the German Franchise Association issued a guidance document which provided an overview of the COVID-19 Mitigation Act and the associated legal issues specific to franchising. A few months on, this article examines which issues remain the most relevant for franchising......
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Noerr PartGmbB | Germany | 2 Jun 2020

When the asterisk is missing: Munich Higher Regional Court's King of the Month decision

Special deals are common among competing burger chains. Although this may be detrimental to franchisees, the Munich Higher Regional Court recently decided that such deals do not infringe antitrust rules. This decision deserves particular attention, as it concerns the common situation of a franchisor using non-binding price recommendations in its advertising and once again clarifies how......
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Noerr PartGmbB | Germany | 13 Aug 2019

Inadmissible imitation of 'presentation of dishes': stronger protection for gastronomic concepts

Franchisors must typically consider the extent of concept protection if franchisees which have left the franchise system reuse the concept in a largely unchanged fashion or if third-party competitors (outside the franchise system) copy the concept's main features. A recent decision concerning a fast-food restaurant franchise reinforces the IP protection of gastronomic concepts against......
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Noerr PartGmbB | Germany | 30 Apr 2019

Bogus self-employment and unethical franchise agreements

Case law from the highest German courts on franchise law matters is rare, which makes a recent Federal Court of Justice decision on the subject of bogus self-employment of franchisees – a perennial issue for franchise law practitioners – even more noteworthy. The case concerned claims for payment under a licence agreement and the question of whether the licence agreement was void due to the......
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Noerr PartGmbB | Germany | 15 Jan 2019

For want of an asterisk: regional court scrutinises franchisor's TV advertising

The Munich Regional Court I recently established a new precedent for competition restriction, which is prohibited in franchising systems under the Act against Restraints on Competition. The court found references to "participating restaurants" in a franchisor's TV advertising insufficient and in violation of the price maintenance prohibition. This decision deserves special attention as it......
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Noerr PartGmbB | Germany | 2 Oct 2018

Admissibility of lawsuit despite effective mediation clause in franchise agreement

A recent Hamburg Regional Court decision is generally understood to have solidified the first franchise-related court judgment on bad faith regarding mediation clauses rendered by the Saarbruecken Higher Regional Court in 2015. However, at second glance, the Hamburg judgment provides a different reasoning for bad faith regarding a mediation objection and might therefore serve as a new......
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Noerr PartGmbB | Germany | 6 Feb 2018

Requirements for interim injunction to enforce obligation to operate business

The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be......
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