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22 December 2020
Karsten Metzlaff Appeals court finds clause allowing franchisor to unilaterally increase franchise fee to be invalid

Germany - Noerr LLP

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 shows that caution is needed when drafting fee adjustment clauses.

Authors: Karsten Metzlaff, Jasmin Schulzweida, Tom Billing
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