Our team of experienced franchise dispute resolution specialists is an integral part of our franchise team. We advise on all stages of the dispute avoidance and resolution process from pre-contractual disclosure documents, audits of franchisee recruitment materials, and training on precautions to avoid the risks involved, such as minimising the exposure to misrepresentation and breach of contract claims against the franchisor. We give initial trouble-shooting advice, and ultimately advise on mediation, litigation and arbitration.
Early dispute resolution input is critical. We regularly advise on issues such as termination, managing franchisee performance issues, injunctive relief to prevent competition with the network, and strategies to avoid escalation of network-wide franchisee unrest.
If disputes do escalate, we have substantial experience of mediation, arbitration and litigation – including enforcing post termination non-compete obligations. We are proud to say that we have never lost a case.
In addition to our significant UK disputes expertise, we regularly advise clients on disputes arising out of international franchise relationships and roll-out programmes. We have recently advised clients on disputes, and managed litigation, in countries as diverse as Hong Kong, Romania, India, China, the UAE and Brazil.
We have significant experience of franchisee class actions and have successfully represented groups to re-negotiate their franchise agreements, obtain damages, free themselves from contractual restrictions or buy out the business from their franchisor (where we believe we were the pioneers of the franchisee buyout).
Notable deals / highlights
Acted for the winning party in many of the landmark franchise cases, from Dyno-Rod v Reeve – the seminal case on enforcement of post termination non-compete obligations – through to the more recent Court of Appeal case in ChipsAway v Kerr concerning protection of a franchisor's goodwill.
We have advised a major national restaurant chain on its brand enforcement overseas, securing a quick and successful resolution to two instances of trade mark infringement in Japan. Following the initial correspondence, the restaurants in question quickly rebranded and agreed not to infringe in the future - all at very little cost to the client.
We have advised over 40 individual franchisees of a national chain of opticians on contractual issues flowing from the franchisor's decision to purchase a competing business (which included a sizeable estate of franchisee operated outlets) and merge the purchased business into its existing network. We have negotiated directly with the franchisor on behalf of a group of franchisees on various, potentially litigious, issues and have also advised on a number on franchise sales and exits as resolutions to territorial overlaps.
We are currently advising a major and high profile franchisor in the defence of multiple claims, amounting to in excess of £100m. These claims have been brought by former franchisees in connection with the closure of a franchise network. The claims are advanced in contract and misrepresentation. They involve a complex formulation of alleged loss. We are working with our client on a clear commercial dispute resolution strategy (involving mediation) which will ensure a coordinated and strategic response to the various claims.
We recently advised a franchisor in the defence of a claim brought by a franchisee seeking a declaration that his franchise agreement be set aside for infringement of competition law. The defence involved a mix of law, fact and economics. The key issue was whether the Franchise Agreement infringed the Competition Act 1998 and does not benefit from exemption either by way of the Verticals Block Exemption or by way of individual exemption under section 9.
We are currently acting in an international context for various franchisees claims against their respective franchisors. These claims are in the High Street and retail sector. They typically involve allegations of derogation of grant and ancillary breaches of contract. Coordinated franchisee claims frequently involve complex funding and governance arrangements which can provide a platform for highly effective action by franchisees.