Customer Data in Franchise and Distribution Relationships

Juni, 2019 – Tessa de Mönnink, Annelies van Zoest

In many franchise and distribution contracts which were concluded a long time ago almost nothing has been laid down regarding the use of customer data. Nevertheless, there are various reasons to make good and clear arrangements on this, here, in the year 2019.

Privacy aspects

In the very first place, by reason of the privacy aspects inherent in customer data; for if a franchisee (or franchisor) handles customer data obtained that can be traced back to persons by her or his contracting party in an illicit manner, then this may also have a negative impact on the franchisor (or franchisee). This may affect both name and reputation, but may also involve (substantial) fines. Furthermore, it remains to be seen whether consumers are really aware of who is collecting the data. Data which can be collected may readily be sensitive data, such as for instance, data collected by hotels regarding their regular guests, by reason of specific preferences, or by medical clinics. To sensitive consumer data stricter rules apply than to “ordinary” consumer data.

Klantdata is commercially valuable

Another good reason to make arrangements on this is that it often concerns commercially (very) valuable data. Both during the collaboration, but also when parties take leave from each other, it is important to know who is allowed to use what customer data for what purposes.

Trade secrets and intellectual property rights

Furthermore, customer data can be protected by intellectual property rights, or related rights, for instance if it concerns a databank or trade secrets. In that case also it is important that the parties have agreed who is the owner of these rights.

Finally, there can be legal ‘stings’ in obtaining customer data. In several countries surrounding us (such as for instance Germany) the obligation to provide customer data may trigger the agency rule, and as a result customer fees may have to be paid by the supplier/franchisor to the distributor/franchisee upon the end of the relationship.

In short: it is better to make clear arrangements on use of customer data with your suppliers and buyers, than being up for a negative surprise over time.

Tessa de Mönnink


Annelies van Zoest