Franchise Agreements

A reminder for franchisors to review their franchise agreements

Franchisors should be encouraged to review their franchise agreements in the light of a recent High Court decision. The court held that the actions of a franchisee's employee, who harassed a client using personal data obtained through her employment, were attributable to the franchisee. However, the court ruled that this did not allow the franchisor to terminate the agreement. The franchisor was required to provide evidence of actual damage to its brand caused by the franchisee's actions, which it could not. The franchisor's fear or concern of damage to the brand was insufficient.

Franchisors should carefully review their agreements to ensure that there is sufficient flexibility in the drafting of restrictions on the franchisee associated with protection of the franchisor's brand and reputation to allow for immediate termination when these obligations are breached. 

This checklist highlights the advantages and disadvantages of franchising a business from the franchisor's perspective.

For further information please contact our Business Law Team.

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O'Neill Patient Solicitors LLP
Chester House, 2 Chester Road, Hazel Grove,  Stockport, Cheshire, SK7 5NT


0161 694 3000 / 0161 483 8555



0844 576 2140 (we do not accept service by fax or email)