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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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I do have a Franchise agreement of 5 years with DPD Courier

Resolved Question:

I do have a Franchise agreement of 5 years with DPD Courier Company as a self employed. The manager partly changed the area that was assigned to me without any notice whilst I was on holiday. A clause in the contract says that: "DPD may at any time change the area comprising the Territory by giving to the Franchise not less than one calendar month`s notice in writing and on the date specified in that notice the definition of the Territory shall be altered as specified in the notice". The territory as per contract is E, EC, SE and SW postcodes. Does he can do that without let me know and what I can do about? This has happened not the first time, the other time when I got to work the manager told me that I won't work in my area but the other. I told him that he can not forbidding me of working in my area and left work. He charged me £150 for the day and sent a breach letter saying that I failed to provide the services as laid down in my franchise agreement.
Submitted: 2 years ago.
Category: Law
Expert:  tdlawyer replied 2 years ago.

tdlawyer :

Hello, thanks fir your question. My name is Tony.

Customer:

hello

tdlawyer :

Hello. My initial response is that that seems a very harsh thing for the franisor to be able to do, especially if you're not in breach of the agreement to start with.

tdlawyer :

In theory, if that clause was applied literally (with nothing curtailing its exercise) then you could be stripped to 1 postcode area with no reason and very quickly. This would obviously have a detrimental impact upon the value of your business and the money that you make from it.

Customer:

Is it legal what he did according with the clause I sent to u

tdlawyer :

He would have to give you notice, as the clause requires that, and it must be one calendar month's notice. It does appear, on the face of it, as though the changing of territory seems allowed by that clause. However, I do wonder whether that clause is not qualified by some other provisions in the agreement.

Customer:

but the change of territory would mean a change of depot because that one covers just the postcodes I sent to you on the message

Customer:

on the franchise agreement the territory part has just two clauses

Customer:

one I have sent to u

Customer:

the other says

Customer:

the franchise agreement shall be entitled to operate the besiness only in the territory, but this shall not prevent geopost from appointing other franchises to operate the business in the territory nor from providing the service or selling the quick start service in the territory itself

tdlawyer :

Is the franchisor a member of the British Franchise Association?

Customer:

I don't know but must be

Customer:

the company its called GeoPost

Customer:

they made £500m last year

Customer:

the company is ruge

Customer:

huge

tdlawyer :

Well, you might want to have a look at that specifically, and raise this issue with the BFA. It seems like an overly oppressive clause, which entitles them to effectively take away the vast majority of your franchise at any stage and for no reason. Thats seems unlikely to pass the BFA requirements on reasonable and ethical franchising etc., but everything does depend on the facts of the case, the price you pay and all such things.

tdlawyer :

You may have arguments based upon other clauses of the franchise agreement, which effectively prevent the franchisor from exercising the right to change the area. I would strongly recommend that you get the agreement reviewed in full by an experienced franchising solicitor.

Customer:

and what would you say about the company not letting the drivers take the franchise agreement home before signing it first

tdlawyer :

I can't understand why they would do that. They should be allowed to take the agreement home and obtain advice on it before signing it.

tdlawyer :

That is standard practice for most industries entering into agreements, and anything else may be seen as being oppressive.

tdlawyer :

This is unlikely to make the agreement unenforceable, but it isn't the best practice you'd expect to see when entering into a new relationship with somebody who is forming part of your larger business interests.

tdlawyer :

This is why I think that the BFA would be interested to hear what you have to say about this.

Customer:

I thought so that wasn't right, but I needed the job and I signed anyway

Customer:

by those two clauses I have sent you would say that he has not right to change the area from one day to another

tdlawyer :

No the clause seems require one months notice. Accordingly, the area cannot be changed from day-to-day.

tdlawyer :

Importantly, if the franchisor does try to do this, then it may amount to a breach of the agreement, entitling you to exit and the discharged from any further performance. However, before you look at going down that road (if that is something you might wish to consider) I strongly encourage you to get the agreement reviewed by a solicitor.

Customer:

should I go and try to talk with my manager about this matter or should I go see the solicitor first

tdlawyer :

I would see a solicitor first.

tdlawyer :

They will tell you what your rights are, and what you should and should not say if you do then talk to your manager. You may have grounds to exit your franchise agreement, or at least renegotiate something more favourable to you. But professional advice with someone looking at the agreement is essential before you try to do that.

Customer:

because get the agreement reviewed by the solicitor it would be something I should have done before I even started the agreement

tdlawyer :

In an ideal world, you would have a review first. But you did not do that, and you cannot change that. But you can take professional advice now.

Customer:

ok thanks for your help

tdlawyer :

Is there anything else that you would like to ask me about this?

tdlawyer :

And can I ask whether you are happy with the service received today?

Customer:

as I have the contract for 5 years, does the company can change the rates of the payment for the deliveries?

tdlawyer :

This will depend whether there is a term in the contract allowing them to do that. If there is, then yes, they would be able to do it, otherwise, not likely.

Customer:

and my manager said on the negotiation about the new rate that if I do not accept the new rate that he would change my area, which I did not would like and he used that against me to agree to the new rate. what would say about that

tdlawyer :

The same really, it's all a bit heavily in their favour it seems. You should get this checked, because it doesn't sound like an exercise of power you would normally see.

tdlawyer :

I'm not saying that can't do this, it comes down to the specific text in the agreement, but what I can say is it doesn't sound very favourable to you at all.

Customer:

would see that as a harassment?

Customer:

like using his power to have me to agree to something

tdlawyer :

It could potentially be harassment, yes, although in fairness you don't usually deploy that argument in type of context. That said, there is nothing that prevents it being used that' aware of (unless you trade through a company, in which case it can't be harassment).

Customer:

I have the whole conversation recorded, is about 20min. Could I have done that?

tdlawyer :

Recording the conversation isn't harassment and it's not illegal.

Customer:

thanks for your help

tdlawyer :

You're very welcome.

tdlawyer :

Can I ask whether you're happy with my service today please?

Customer:

yes

tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience: 11 years experience of general practice.
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