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Ash
Ash, Solicitor
Category: Law
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Experience:  Solicitor with 5+ years experience
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Hi Alex, I've received a Breach of Franchise letter from

Resolved Question:

Hi Alex,
I've received a Breach of Franchise letter from a Franchisee. I have a couple of general questions about it.
thanks
Marilyn
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts : Hello Marylin and thanks for requesting me
Alex Watts : What is it you would like to discuss?
Customer:

Hi Alex,

Customer:

I received a Breach of Agreement letter from my franchisee. I have a few questions about it. I'm not so much concerned about the content, but some terminology, etc.

Customer:

I'll copy the details I have questions about:

Customer:

3. Breaches have occurred as follows:

XXX

4. These breaches have deprived us of substantially all the benefit of the Agreements.

You are therefore in repudiatory breach of contract.

5. Without prejudice to our rights noted below, by this letter, we are exercising our rights to terminate the Agreements at common law.

6. We will also seek damages of XXX, calculated by reference to the proportionate

term and franchise fees paid as follows: XXX

7. We reserve all our rights and remedies in relation to any breach.

8. We look forward to receiving an acknowledgement of receipt of this notice and your response no later than 31 December 2014.

Customer:

Firstly, I'm concerned about the term "repudiatory breach of contract." what does this mean?

Alex Watts : That means the breach is so severe its ended the contract
Alex Watts : I am just on the train so there may be a delay in my replies
Customer:

Does it mean that I have to assume that it is now ended and they no longer are in a contract with us?

Customer:

Or are they telling me this is there assessment?

Customer:

*their

Alex Watts : If you agree then it's ended
Alex Watts : Otherwise you can continue to try and perprm
Alex Watts : perform the contract
Customer:

Ah right...no I definitely don't agree

Alex Watts : If they continue to accept performance then they affirm it which means they accept any breach that has happened
Customer:

Right...so if she carries out any tasks, etc, then she's suggesting that she doesn't accept a breach has happened?

Customer:

So I should expect her to not be carrying out tasks?

Alex Watts : Can I clarify anything else for you?
Alex Watts : Yes you are right
Alex Watts : if she carries out tasks then the contract is affirmed or agreed
Customer:

Well now I'm concerned about the Franchise role that she should be performing...and the customers that are not being serviced

Customer:

What can I do about this?

Alex Watts : Ok. That is a side issue. The main focus should be on the alleged breach
Alex Watts : If the client is not carrying it out then you can treat it as ended and service those clients
Customer:

She has raised 10+ issues, for which I have concrete evidence are untrue. she hasn't given room to discuss these.

Alex Watts : Ok that's fine
Alex Watts : Then you can sue for breach or contact the customers if she is failing to carry out what was agreed
Customer:

Ok. So just to be totally clear...the points 4 & 5, mean that she has ended the contract with us:

Customer:

4. These breaches have deprived us of substantially all the benefit of the Agreements.

You are therefore in repudiatory breach of contract.

5. Without prejudice to our rights noted below, by this letter, we are exercising our rights to terminate the Agreements at common law.

Customer:

Should I consider them terminated as of yesterday?

Alex Watts : Yes
Alex Watts : You can therefore take steps to protect your customers
Alex Watts : Does that help?
Customer:

In taking on the operations in their area, I am not inadvertently "accepting" the breach am I?

Alex Watts : No - you are protecting the business
Customer:

Ok.

Alex Watts : Can I clarify anything else?
Customer:

Also, I've penned this response, as we have a clause in our contract to involve a mediator/"Expert" in matters such as this. I was going to send the following:

Customer:

We dispute your claim for termination due to breaches of contract and your claim for damages in your letter dated <date>. We have significant evidence to support our position and clearly demonstrate omissions, exaggerations and incorrect statements made in this letter. As already suggested on <date> and on <date> we would like to jointly appoint a mediation expert who specialised in franchise disputes to work with us both to manage a satisfactory conclusion of this matter. Our suggestion is that by <date> we jointly ask the Academy of Experts to appoint a mediator (http://www.academyofexperts.org/) and follow their code of practice through the mediation process.

Alex Watts : Yes that is a good idea and required by the terms
Customer:

Ok...however, I'm a little wary that I'm offering mediation, but then I'll be taking over the operations in her region....

Customer:

Should I ask that she clarify this matter?

Customer:

Are you there Alex?

Alex Watts : Can I clarify anything else?
Customer:

Hi Alex, yes as I just said I'm a little wary that I'm offering mediation, but then I'll be taking over the operations in her region....




Should I ask that she clarify this matter with her, to confirm that she is no longer performing any operations?



Alex Watts : Yes ask her to confirm in writing then you know for certain what you are dealing with
Customer:

Ok. thanks

Alex Watts : Can I help with anything else?
Customer:

No that's all thanks

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