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Franchising Industry Update

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

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Franchising Industry Update

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  1. Franchising Industry Update • Iain Taylor, TLT LLP

  2. New developments in the last four months Issues with franchise contracts Trade marks Minimum performance obligations What we will cover

  3. New developments

  4. No major new legal developments or cases Recent case on post-termination restrictive covenants PSG Franchising Ltd v Lydia Darby Limited Legal developments

  5. More big companies including a franchise division O2 WHSmith General franchise developments

  6. 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

  7. Issues with franchise contracts

  8. 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

  9. 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)

  10. 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)

  11. For more information, contact: Iain Taylor, Solicitor TLT LLP One Redcliff Street BRISTOL BS1 6TP Tel: 0117 917 7694 Email: iain.taylor@tltsolicitors.com

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