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 important the asterisk reference is in such cases.
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 competitors' inadmissible imitations.
Tenants in Germany are generally well protected against rent increases in existing tenancies and high rent increases are uncommon; however, a major exception is when flats or houses are modernised. New legislation aims to offer tenants improved protection against abusive practices when modernisation work is announced and carried out and prevent them from being disproportionately burdened by rent hikes due to modernisation.
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 franchisee's bogus self-employment.
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 relates to advertising with non-binding price recommendations, which is common among franchisors.
Federal Court of Justice case law suggests that the parties to a real estate purchase contract can in principle immediately change its content without having to comply with notarial form requirements after the notarial certification of the real estate purchase contract containing the conveyance has been concluded. The court's recent decision in this regard is to be welcomed in the interests of the continuity of its case law and in view of the lower courts' increasingly inconsistent case law in the past.
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 application of bad faith in future franchise-related court proceedings regarding mediation clauses.
Since 2009 Russian law has contained express provisions on shareholders' agreements. Further provisions of the Civil Code came into effect in 2014. The law sets out what shareholders' agreements can and cannot require shareholders to do and whether they can be enforceable against third parties, as well as whether they must be publicly disclosed or registered.
There are a number of restrictions on share transfers in Russia which companies should bear in mind. In addition, companies should be aware of the laws regarding whether minority shareholders can alter or restrict changes to share capital structures, when shareholders must notify changes to their shareholding to a regulatory authority and whether companies can buy back their shares. A number of restrictions also exist with regard to exiting a company.
The Ministers of Finance of the Federal States recently agreed on new real estate transfer tax (RETT) rules for share deals. According to official press releases, a fundamental RETT reform that had been previously discussed was not agreed. Rather, the agreement consists of new RETT rules regarding share deals with a lower threshold, longer holding periods and aligning the rules that are applicable to corporations with those that already apply to partnerships.
Transaction structures involving special purpose vehicles, whose main assets after completion of the purchase process consist only of the purchased real estate, are often chosen in Germany. Such structures are used in particular to shield from liability, so that third-party access to the special purpose vehicle's assets is limited. They are also used to facilitate a sale without incurring real property transfer tax for the exit.
Transactions of Russian joint stock companies and limited liability companies require the consent of the general meeting or the board of directors if they qualify as material or interested party transactions. As the non-observance of the relevant requirements may be grounds for contesting these types of transaction, they should be observed not only by shareholders and members of the corporate bodies of the respective companies, but also by persons that wish to enter into such transactions with these companies.
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 remedied.
The operation of energy plants usually means securing the required land long term by way of a use agreement. Prematurely ending a use agreement can substantially reduce the profitability of investments in energy plants. Defects in the written form of use agreements therefore constitute a risk for such investments. However, the Federal Court of Justice has decided that written form remedy clauses are invalid and do not prevent a contracting party from terminating a use agreement by invoking a written form defect.
The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.
Patient treatment and research creates a wealth of data. Given that health data is sensitive, reaping the benefits of data-based medicine brings particular challenges when it comes to data protection requirements. EU data protection law is currently based on the Data Protection Directive, among other things. This directive will shortly be replaced by the General Data Protection Regulation, under which data concerning health is subject to increased protection.
Parliament recently passed a law revising the safeguarding of secrecy where third parties are involved in the exercise of professional duties by persons with a duty of confidentiality. The legislature responded to calls for a long-overdue reform and finally updated the criminal rules on secrecy for certain professionals. For the healthcare sector, this reform opens up a number of new opportunities for using the services of external service providers without facing the risk of criminal liability.
For companies that are interested in entering the Russian market, but reluctant to establish a physical presence in the country, an online presence can be a viable alternative. The legal requirements for selling goods to Russian customers online are similar to those of other countries. In addition to complying with the mandatory requirements of Russian law, sellers should also make use of the benefits offered therein.
In recent years, the commercial titles of the Civil Code have been aligned more closely with international commercial practices and the Russian courts have been enforcing these new standards. These improvements are noticeable in the area of franchise law. Because these statutory provisions are new, franchisors should check the latest court decisions for additional guidance before structuring transactions based thereon.
A landlord can terminate a rental agreement for residential premises if he or she has a justified interest in ending the lease. Two recent Federal Court of Justice decisions provide clarification regarding a landlord's needs as grounds for termination. While the change in case law regarding the legal consequences of a breach of the duty to offer is welcome, the judgments also show that there is no one-size-fits-all answer to the question of whether termination due to a landlord's needs can be declared valid.