Download - Franchising Industry Update
TLT LLPTLT LLP
Franchising Industry UpdateIain Taylor, TLT LLP
TLT LLP
• New developments in the last four months• Issues with franchise contracts
• Trade marks• Minimum performance obligations
What we will cover
New developments
TLT LLP
• No major new legal developments or cases
• Recent case on post-termination restrictive covenants
PSG Franchising Ltd v Lydia Darby Limited
Legal developments
TLT LLP
• More big companies including a franchise division• O2• WHSmith
General franchise developments
TLT LLP
• Increase in IT services franchises (eg marketing, website design)
• In many of these, customer contracts directly with the franchisor
How does this fit with the franchise model?
IT franchises
Issues with franchise contracts
TLT LLP
• Franchisor has business (a) making and selling drinks and (b) offering bartending/waiting services (these are two different classes)
• Franchisor has a trade name "Bar Solution" and logo• Franchisor has registered a word-only trade mark for
"Bar Solution" to cover "manufacture of beverages"
How well protected is the franchisor?
Trade marks
TLT LLP
• Franchisor wants to improve network performance and profitability
• Franchisor seeks to impose new targets on existing franchisees
• Franchisor sets the targets as (a) increasing turnover by 10% each year; and (b) selling to a greater percentage of database each year
What are the problems with this?
Minimum performance requirements (1)
TLT LLP
• Franchisor requires franchisees to meet 70% of target each year
• Franchisor requires franchisees to meet 85% of target to get a renewal
How fair do you think this is?
Minimum performance requirements (2)
TLT LLP
For more information, contact:
Iain Taylor, Solicitor
TLT LLP
One Redcliff Street
BRISTOL
BS1 6TP
Tel: 0117 917 7694
Email: [email protected]
