TLT LLP Franchising Industry Update Iain Taylor, TLT LLP.

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Presentation transcript:

TLT LLP Franchising Industry Update Iain 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: