There are thousands of franchises in the UK, with many well-known names taking the helm such as Dominos, McDonalds and KFC. Despite their popularity, franchise disputes are not uncommon. This is because often the franchisor and franchisee objectives differ significantly, with the franchisors looking to maximise their market share, while franchisees strive to grow a profitable business.
Common causes of disputes include:
- The franchisor misrepresenting earning potential
- Breach of contract
- Enforcement of post termination restrictive covenants
- A lack of training and support provided by the franchisor
- The franchisor enforcing upgrades deemed too expensive and unreasonable by the franchisee
- Franchisor making promises that are not delivered
- Disagreements over stock and quality of produce
There is no legislation in the UK that specifically regulates franchises. It is therefore paramount that the franchise agreement is clear, detailed and understood by all parties.
When things go wrong, it is essential that professional legal advice is sought from solicitors with direct franchise experience. This area of the law is complex and can often involve other areas, such as intellectual property, contract law and insolvency.