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European Parliament supports SP in demanding action on contracts which keep franchise-holders in stranglehold

19 December 2012

European Parliament supports SP in demanding action on contracts which keep franchise-holders in stranglehold

Voting on 18th December in the European Parliament Internal Market Committtee demonstrated broad support for SP proposals aimed at putting an end to contracts which maintain franchise holders in a stranglehold. Commenting on the vote, SP Euro-MP Dennis de Jong said: ‘Now the European Commission is charged with reforming EU legislation so that franchise-holders regain the decision-making freedom enjoyed by business people.’

Franchise-holders have presented the SP in the European Parliament with a whole pile of complaints regarding problems with EU franchise rules. ‘If, for example, a franchise-holder of the Dutch supermarket chain Albert Heijn decides to sell the business, he can only sell it to the parent corporation,’ De Jong explains. ’With only one negotiating partner, and moreover a powerful one, you cannot as a franchise-holder get a fair price. The European Parliament now agrees with me that this is in conflict with EU competition rules.’

But it is not only through financial regulation that franchise-holders are restricted by the parent corporation. ‘Parent firms have as things stand far too much power over the ins and outs of franchise-holders,’ says De Jong. ‘Franchise-holders are business people, so it’s extremely important to them that they decide for themselves how to run their shop, that they can expand, or open some other kind of business in the same branch if the customer’s purchasing power declines, for instance. The European Parliament has now at last recognised these problems and is supporting franchise-holders in these important demands.’

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