Franchise Dispute – what should you do?

Running a Franchise and having a dispute with your Franchisor can be extremely stressful. The time, energy and money invested into your business means any dispute with your Franchisor should be handled carefully.

What sort of disputes can arise between Franchisor and Franchisee?

The types of disputes that can arise are as follows:

1. Upon making enquiries with the Franchisor, the Franchisee now believes the profit being made is not what was promised at the outset;
2. The Franchisee feels there is lack of or no support from the Franchisor which again was promised at the outset and outlined in the terms of the Franchise Agreement;
3. The Franchisor has concerns that the Franchisee is not following the protocol required which is having a detrimental effect on the performance of the business and profits made.

All of the above can lead to claims for a breach of contract and/or misrepresentation.

I am Franchisee and I have a dispute, what should I do?

As a Franchisee you should always maintain dialogue with the Franchisor and aim to resolve the dispute as swiftly as possible.

It would be prudent to obtain legal advice as soon as possible. This is so dialogue can be initiated straight away and your Franchise Agreement reviewed.

The Franchise Agreement is the legal document which governs your relationship between you and your Franchisor. There will be a series of clauses which set out what your respective duties and obligations are to one another.

I have a dispute, you have my Franchise Agreement, what next, Court?

Not necessarily.

In the terms of the Franchise Agreement there ordinarily is a clause which sets out what steps are to be taken in the event there is a dispute. Such steps would suggest the parties consider Alternative Dispute Resolution such as arbitration and mediation to ensure the dispute can be resolved promptly and cost effectively.

If, however, such steps come to no avail then recourse to the Courts may be your only option left.

The last thing any Franchisee wants is to have dispute with their Franchisor. Disputes of this nature can strain relationships between commercial partners whilst they still have obligations to each other. It can also transform a fully functioning and profitable business into a stressful place affecting all the associated stakeholders. Therefore, careful thought and planning must be put into finding a resolution to avoid such a strain and more importantly prevent costs spiralling out of control.

Here at Franklins Solicitors LLP we understand that you want a quick resolution that is also cost effective. We will work with you to provide specialist advice and ensure a full case plan is prepared to outline your options and next steps. For advice and further information, contact the Dispute Resolution team on 01604 828282 / 01908 660966 or email Litigation@franklins-sols.co.uk.