franchising industry update
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Franchising Industry Update. Iain Taylor, TLT LLP. New developments in the last four months Issues with franchise contracts Trade marks Minimum performance obligations. What we will cover. New developments. No major new legal developments or cases - PowerPoint PPT PresentationTRANSCRIPT
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]