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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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I run a franchise (developmental classes). it is a well

Customer Question

HI. I run a franchise (developmental classes). it is a well know brand and there are a lot of franchisees all around the UK (and internationally). The contract is a standard one with no flaws in it and runs for five years. However, when I took on the business I was assured by my master Franchisor that no one would work in the neighbouring territory as it borders on to others that all want this area. . I pull a lot of my business from this area and I saw today that a new person is setting up in the area. Would this give me grounds to stop my contract early with no fees (I am bound by paying a min class fee and quarterly franchise fee whether I run or not)? I barely make much each year as it is so this new class will significantly impact on one of my areas that was currently successful
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Does the franchise agreement say anything about your franchise territory (i,e is the territory defined) or having exclusivity in that territory?
Did you get anything in writing from the franchisor before the contract was signed to say that you would have an exclusive territory?
Kind regards
AJ
Customer: replied 1 year ago.

Yes. it defines my territory (as others are) by postcodes. The postcode in question (and the actual location this new person has set up in) is 1.3 miles from one of my classes. It is in a post code that I not in my contract. However, when I talked to my Master Franchisor she verbally said no one will be allowed to set up in this area as it boarders on others areas (min and another's) and all of them want it so it is not being allocated.

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
The fact that the Franchisor is in breach of contract does not necessarily give you grounds to terminate.
Ultimately you could sue the franchisor for contractual misrepresentation.
If you wanted grounds to terminate you would need to prove that not selling that geographical was a condition of the contract. If you can prove it was a condition of the contract then that would give you grounds to terminate.
Unless the franchisor agrees to allow you to leave you have to accept that terminating will cause a dispute.
So what do you want to achieve? To be able to leave without charging termination fees?
Kind regards
AJ
Expert:  Alex J. replied 1 year ago.
Hi,
Can you respond to this link?
Kind regards
AJ
Customer: replied 1 year ago.

It was not in the terms of my contract BUT I was assured the postcode the other person just set up in was not going to be given to anyone else.

I do want out. Yes I am looking for a reason now.

I have had a few other issues like taking four months to fix a web site issues that meant none of my classes showed on the main company home page. OR evidence of not helping me make my web searches more relevant to support searchers potential customers made on line. And a lack of national advertising that Head Office used to do (claiming a certain percentage of our franchise was spent on national advertising but hadn't been of late)

I am not sure if any of these are breach of contract but certainly not supportive as they claim they would

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
Have you broached terminating the agreement with the Franchisor?
I will write a response detailing your options this will take me a little while so please do not be concerned if you do not hear from me right away. I will revert to you by tomorrow afternoon at the latest.
Kind regards
AJ
Customer: replied 1 year ago.

It was not in the terms of my contract BUT I was assured the postcode the other person just set up in was not going to be given to anyone else.



I do want out. Yes I am looking for a reason now.



I have had a few other issues like taking four months to fix a web site issues that meant none of my classes showed on the main company home page. OR evidence of not helping me make my web searches more relevant to support searchers potential customers made on line. And a lack of national advertising that Head Office used to do (claiming a certain percentage of our franchise was spent on national advertising but hadn't been of late)


I am not sure if any of these are breach of contract but certainly not supportive as they claim they would be

Customer: replied 1 year ago.

I have asked - I am bound by five years - £700 a quarter and £80 class fees a week. - I have done two years by September. My Master Franchisor knows I want to sell but as it is hard to sell a business I resigned my self to keep running and also to look for a class leader to run the classes for me and I pay them (leaving me with next to nothing BUT at least I don't breach the contract)

Customer: replied 1 year ago.

I have asked - I am bound by five years - £700 a quarter and £80 class fees a week. - I have done two years by September. My Master Franchisor knows I want to sell but as it is hard to sell a business I resigned my self to keep running and also to look for a class leader to run the classes for me and I pay them (leaving me with next to nothing BUT at least I don't breach the contract)


Expert:  Alex J. replied 1 year ago.

Thank you very much. I will revert to you as soon as possible. Kind regards AJ

Customer: replied 1 year ago.

Hi Alex - any progress on the summary?

Regards

Lisa

Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you with this.
Do you still require help please?
Customer: replied 1 year ago.

HI

What happened to the Alex J that was dealing with this thread?

Expert:  Ash replied 1 year ago.
He opted out sadly.
Alex
Customer: replied 1 year ago.

Is that allowed? I waited all day for his reply and he just stopped? Why with no explanation? Are you art of the same company then or do I have to start explain from the start?

Customer: replied 1 year ago.
Relist: Other.
He said he would reply and then didn't carry on and another one stepped into the thred, I asked if I had to start from the beginng and then she went off line - both very rude and neither helped me
Expert:  Ash replied 1 year ago.
Yes it is allowed. Do you want me to carry on and help you?
Customer: replied 1 year ago.

Can you see the whole thread or do I need to start again though?

Expert:  Ash replied 1 year ago.
Yes I can see the thread, do you still want me to help?
Customer: replied 1 year ago.

yes please

What other information do you need to know?

Expert:  Ash replied 1 year ago.
What is it you want to achieve please?
Customer: replied 1 year ago.

I would like to explore if I can arrange leaving without being bound by the terms of fees.

I feel the lack of support on these issues has impacted on the business.

I know the contract is not breached - though they say the following on their main web site:

""Franchisee Focused Marketing

Over 90% of

Attachment: 2015-06-13_134138_lisa_sub_franchise_agreement_-_2013.doc

the Baby Sensory marketing budget is used to promote Baby Sensory classes, with only a small percentage focused on selling Franchises. This approach has helped our franchisees to become successful and raised awareness of the Baby Sensory brand. We currently advertise in a number of publications such as Emma’s Diary, which are received by all expectant mothers in the UK, we are listed on most of the leading Baby Activity websites and our own website features prominently with the leading search engines, such as Google""

Well I know they stopped advertising on key sites and we now have to pay individually and they refused to help me amend a small it of source code to help me in my google searches (I run in four areas so need to tailor the title in google searches to reflect it - they said it means my url name will be too long but it is nothing to do with url name - it is a merely amending the source code i.e. typing a new name in ONCE)

Expert:  Ash replied 1 year ago.
Did anyone witness the conversation about neighbouring territory ?
Customer: replied 1 year ago.

I have text saying N21 (the area) was not allocated and had a further conversation on Thursday with my Master Franchisor (MF) said she spoke to Head Office and since found out it had been allocated to this lady who set up session. My MF is not happy, nor is the on bordering North to it (she also wanted it) and the MF who owns it was not aware he sub set up this class. MY MF is waiting for HO to look into the distance - apparently in their contracts there is a limit distance and it is 1.3 miles and she set up JUST too close to me. My MF offered to help her find a new venue in the same postcode but enough away to not impact.

Expert:  Ash replied 1 year ago.
Have they breached the terms of the contract at all?
Customer: replied 1 year ago.

I don't know - I attached a copy for you

but I don't know how I can prove if 90% of the marketing budget is or is not spent advertising

They are meant to support google searches and I have an email where they refuse to do what I said needs to be done (technical advise I have had said it is a three minute job but I cant as I don't have access to the home page

If they allow the lady to run her class next week then apparently she is too close so yes

Expert:  Ash replied 1 year ago.
Did anyone witness what they said to you please?
Customer: replied 1 year ago.

About the web site issue I have emails to show this.

The rest is conversation. I could send an email to my Master Franchisor and get her to reply so that supports the issue?

Expert:  Ash replied 1 year ago.
Please and let me know?
Customer: replied 1 year ago.

Sorry - we are on a time difference so I see gaps in or replies!

I insert an email where it shows I was not supported by HO in the web search issue

Attachment: 2015-06-15_130314_title_in_search_results_no_from_ho_helping.docx

My MF often has verbal conversations rather than emails (easier for her) so I have the issue about the lady setting up close to me on email but the follow up from her was verbal

Attachment: 2015-06-15_130606_competition_within_our_own_company.docx

Can you see them both?

Expert:  Ash replied 1 year ago.
If they represented terms and you entered a contract based on the terms, which turned out to be false or they have breached them then this is breach of contract by misrepresentation. This means you can leave the contract without penalty because the remedy for misrepresentation is that you go back to the position before you entered the contract.
Therefore you can leave, see if they try and take you to Court and if they do your defence is breach of contract by false representation. If any claim for fees is below £10,000 it would be a small clim and you wouldnt need representation.
Can I clarify anything for you about this today please?
Alex
Customer: replied 1 year ago.

so misrepresentation is where there is a clear 'we will do A' and they do not do 'A'?

When they don't support you in issues they have control (like web site searches) where do I stand with that?

Or letting someone set up within a distance that they are too close (1/25 miles is the limit and the other set up withinn this distance?

Are either of these misrepresentation? if not what are they and what can I do?

Expert:  Ash replied 1 year ago.
Yes. So I am offering a red car and it turns out to be green.
As for web searches, only if its a term of the contract and they didnt stick to it would they be liable. Again if someone sets up close the same, but you said you have verbal conversations so this forms part of the contract.
Does that help?
Alex
Customer: replied 1 year ago.

Web is marketing as a the majority of mums coming search online; in my contract it says:




      1. subject to the provision by the Franchisee of such information as the Franchisor may require so as to enable the Franchisor to monitor the performance of the Franchisee provide the Franchisee with reasonable advice and guidance on all aspects of the Franchisee's Business including finance, management, operational and promotional matters and provide reasonable problem solving facilities to the Franchisee so as to enable the Franchisee to operate the Franchisee's Business efficiently and PROVIDED ALWAYS that where the nature and frequency of advice and assistance needed by the Franchisee is such as to require additional training, the Franchisor shall have the right to require such training in accordance with Clause 6.3;




HO representative refused to make a change to my source code (the email I attached) which affects my search terms - is that a breach?

Expert:  Ash replied 1 year ago.
Yes it would be.
ALex
Customer: replied 1 year ago.

Can I clarify....as the other person said this was misre[resentation so not grounds for terminating....

So, Head Office has put in the contract 'reasonable'? Could they not argue that my classes DO show?

My point is that I run in four different areas. By source code is: 'Lisa in Barnet' and I have tags for the other locations I run in (Potters Bar, Elstree etc)

So a search for baby classes in Barnet shows on Google: "Baby Classes by Lisa in Barnet".

However, if someone searches baby classes in Potters Bar it still comes up as "Baby Classes by Lisa in Barnet."

SO they would ignore the result as it is not Potters Bar...

Expert:  Ash replied 1 year ago.
I don't know the specific technicalities, but if they said they would help you and did not, as per the contract, that is a breach.
Alex
Customer: replied 1 year ago.

So what do I do next to release me from this without being liable for contract fees?

Expert:  Ash replied 1 year ago.
You need to write and say the contract has been breached and you are ending it. Whether or not they try and pursue you is a different matter. You should get a Solicitor to write and set out your position.
Alex
Customer: replied 1 year ago.

I did a calculation. if I didn't run for the remaining terms of my contract it would be £16000 I owe in fees so I would need representation then?

So which of the points 1,2 and 3 are breach?

1) they breached the aspect of support in terms of web support to enable me to get better web searcher.

2) I had a period of four months where none of my classes showed on the main home page - it took four months to resolve this issue? is this breach? as I wasn't showing at all for those using internet explorer to search?

3) IF they allow this lady to set up her class this week and run it and it is within the distance they are aloud to run,,,(KNOWING they were aware last week so could have stopped it)

Can you get representation on a no win no fee basis for these cases?

Expert:  Ash replied 1 year ago.
Yes, it is ALL A breach.
No, you cant get no win no fee. If you get sued then you either have to pay for a Solicitor or reperesent yourself.
Alex

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