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MARTINT330
MARTINT330,
Category: Property Law
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Over the last 6weeks I try everything possible with the Isle

Customer Question

Over the last 6weeks I try everything possible with the Isle of Wight Council to allow me to trade
Submitted: 16 days ago.
Category: Property Law
Customer: replied 16 days ago.
No luck at all ,I put all my money to create a new business a mobile catering van but no chance to get a pitch for the Council. I am desperate I will start trading without consent what will be the repercussions?
Expert:  MARTINT330 replied 16 days ago.

Good evening I am happy to help you this evening.

Expert:  MARTINT330 replied 16 days ago.

If convicted at court this could result in a fine of up to £1000 per breach and be followed by revocation of any pending street trading licence. Where the Council considers that a serious breach of any street trading licence condition has taken place the trader responsible for the alleged breach may be asked to attend an officer panel hearing notwithstanding the above.

Customer: replied 16 days ago.
How long I can trade before the Council take me to court?
Customer: replied 16 days ago.
Can the police move me or force me to leave?
Expert:  MARTINT330 replied 16 days ago.

It is not possible to tell how long before they take you to Court. This will depend on Trading Standards and investigations. It is not advisable to commence trading without such consents in place. What is the hold up with the council?

Expert:  MARTINT330 replied 16 days ago.

Is there anything else I can help with tonight?

Expert:  MARTINT330 replied 15 days ago.

Thank you for your enquiry. When you receive an email, could you leave a review? It really helps my ratings.

Expert:  MARTINT330 replied 15 days ago.

Winding up a company in a franchise agreement can be a complex process, with several issues coming into play that would not arise during ‘standard’ company liquidation. This is true whether the company to be liquidated is the franchisor or franchisee, as each party has to deal with their own unique problems as a result of their partner going out of business.

Here we look at some of these issues, how they might be dealt with, and whether it’s possible to get out of a franchise agreement.

Closing a limited company that is franchised

When a franchisee company can no longer pay its debts and enters insolvency, the franchise agreement is generally terminated as a matter of course. Many franchisors include this automatic termination clause in their contract to limit the damage to their own financial situation.

Closing a limited company with debts means that the appointed liquidator takes control of franchisee assets, and sells them to raise funds for the company’s creditors. This is the principal role of a liquidator, along with assessing the company’s liabilities such as their existing contracts.

‘Onerous contracts’ and their effect on a franchisor

Under the Insolvency Act, 1986, onerous contracts may be terminated by a liquidator to facilitate the winding up of an insolvent company. Onerous contracts are seen as a financial burden to a company, and the liquidator’s right to revoke them can provide greater returns for creditors as a whole.

The payment of fees is inherent in every franchise agreement, and forms the basis for a franchisee to operate using the company’s name and other intellectual property. If the office-holder decides to disclaim this agreement, the franchisor becomes an unsecured creditor for any fees and charges that remain unpaid.

Unfortunately for the franchisor, this places them at the bottom of the hierarchy for repayment, and means they may not receive any financial return from the liquidation process.

Franchisor responsibility for arrears of rent

A further issue can arise for the franchisor in terms of their franchisee’s business premises. In a franchise arrangement, it’s often the case that business premises are sub-let to the franchisee company by the franchisor, who holds the ‘head lease.’

The holder of the head lease then becomes responsible for any rent arrears incurred by the insolvent franchisee. This can cause further financial difficulty for a franchisor that may not even have been aware that insolvency was looming for their franchise partner.

What if it’s a franchisor that is to be liquidated?

As we mentioned earlier, part of a liquidator’s role is to identify and take control of company assets. Due to the nature of a franchise agreement, on the financial demise of a franchisor, the company’s intellectual property which plays a crucial part in the success of franchisee partners, will be regarded as a major asset by the office-holder.

Company assets, including intellectual property such as the patents, trademarks and designs, on which the business was originally built, must be sold for the benefit of creditors. In these cases, the franchisee partners may be able to purchase the intellectual property in their own right, and proceed in business without the franchisor.

Getting out of a franchise agreement

Can a franchisee terminate a franchise agreement?

The rights of franchisees to end a franchise agreement are generally very limited, and often only relate to a franchisor’s conduct. This might include instances of failing to fulfil an obligation that is fundamental to being able to operate on the most basic level.

Another example of when a franchise agreement might be regarded as repudiated, is when a franchisee is not provided access to computer systems or equipment needed to carry on their business.

When a franchisor can exit a franchise agreement

Franchise agreements generally include a clause that allows the franchisor to protect their business and terminate the agreement, or when the agreement automatically terminates. This usually happens on the insolvency of a franchisee, or when a serious breach of contract has taken place.

In some cases, franchisors allow their franchise partners an opportunity to rectify their breach, and if this doesn’t happen, they then terminate the contract.

Expert:  MARTINT330 replied 15 days ago.

apologies, this was for another question.

Customer: replied 14 days ago.
All I ask the Council was a pitch of land to trade the answer was'no pitch available at the moment ' .All I can do is start trading without consent. What problems these will bring me?
Expert:  MARTINT330 replied 14 days ago.

I cannot recommend that you do that you could be reported to trading standards, fined by your local council not to mention other competing businesses are likely to report you. For every breach you commit you could face over £1,000 per breach you commit.