The Franchisee’s Right to Compensation by Analogy with Section 89b of the German Commercial Code

It remains an open question whether a franchisee is entitled to compensation under Section 89b of the German Commercial Code (HGB). Based on recent case law, the scope for applying this provision by analogy appears limited. The compensation claim of the franchisee of an unnamed large corporation was dismissed in its entirety (BGH VII ZR 109/13). The Higher Regional Court of Hamm reached a similar conclusion (OLG Hamm 18 U 35/13). The licensing agreement addressed in the so-called “Joop!” decision (BGH I ZR 3/09, 29 April 2010) may likewise be understood, in the context of a franchise-type contractual relationship, as meaning that a right to compensation may arise only where the franchisee distributes products manufactured or supplied by the franchisor.

However, the matter has not yet been conclusively settled. As of the first half of 2018, the Federal Court of Justice has not yet ruled on the specific conditions under which a franchisee may, where applicable, exercise a right to compensation.

The future therefore remains interesting.