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Existing Franchisors - Disputes
Franchising is by its nature “heavy” on disputes because of the large number of franchisees who have entered into detailed and complex commercial contracts – their franchise agreement.
There are two overriding principles which apply to franchise disputes. They are that they must be dealt with in as cost effective a way as possible and secondly, you have to be successful! Franchise disputes often involve relatively small sums of money but very important points of principle which if a franchisor does not succeed in winning could have very serious repercussions on the franchise system. Our advice is aimed at achieving these two principles and accordingly
Mediation
We have acted as a mediator appointed by the British Franchise Association as part of its mediation procedure and have acted for a large number of franchisors in mediations. In all the mediations we have been involved in our franchisor clients have confirmed that they have had a successful outcome from the mediation.
We encourage the use of mediation as a cost effective way of resolving franchise disputes – remember in mediation no decision is imposed on you; it is up to the franchisor and the franchisee to resolve their dispute with the help of the mediator. If you are not willing to settle you don’t have to!
Arbitration
Again the British Franchise Association has its own arbitration scheme and we are one of only very few legal experts whom the BFA have appointed as an arbitrator.
Litigation
In some cases litigation is the only way to resolve a dispute. This is particularly the case when urgent action is required – for instance to stop a franchisee from setting up a competing business or passing on confidential information. In these situations franchisors have to give serious consideration to seeking an injunction – a court order breach of which could amount to contempt of court.
Injunctions
Are sought in situations of high tension but franchisors have to act calmly because inevitably other franchisees who may be aware of what is going on will be looking out for any sign of weakness from the franchisor and will, of course, take full advantage of an adverse decision. Franchisors simply cannot afford to loose. We have never failed to obtain an injunction on behalf of a franchisor!
Resolution
Our expertise does not only rest in resolving disputes but also ensuring disputes do not lead to court, arbitration or mediation in the first place if that is not in the franchisor’s interests.