87
heel in the mistaken belief that (in some cases
at least) in making such disclosure/revelation
v
i
c
e
or more usually, in threatening to do so, the
franchisor will be so afraid of what it rightly or
e

a
d
wrongly perceives will be the ensuing damage
to its reputation, that it will change its attitude
and approach to its franchisee irrespective of the
merits of the franchisee’s case.
In practice, of course, such provisions have
f
r
a
n
c
h
i
s
always existed in most franchise agreements in
a different guise. Most franchise agreements have
long contained clauses which restrict franchisees from
doing anything which might damage the reputation
of the franchisor or its brand, the breach of which
would result in the ultimate sanction of termination
of the franchise agreement. What is happening now
is that the new clauses effectively spell out, and
are therefore intended to act as a deterrent and
a warning to the franchisee, what was previously
stated in a more restrained manner. I have heard
it said by some that by including such a provision,
franchisors exhibit signs of insecurity and
possibly paranoia and that any franchisor who
deals fairly and ethically with its franchisees
should have no difficulty whatsoever in
weathering a storm which might be whipped
up by a franchisee. At the end of the day it has
to be remembered that if a franchisee by its
conduct adversely affects the reputation of a
franchise, this will adversely affect not only
the franchisor but also the franchisee itself
and all other members of the network.
Whether or not such a
provision is enforceable in law
‘Clauses in franchise
will depend on the circumstances
agreements have
of each case. However,
been commonplace
franchisees should be aware that
if they openly air their grievances for some time…’
through the media, they may find
themselves at the receiving end
manzoor ishani is a
of an injunction restraining them
Senior Consultant Solicitor
with Sherrards, a former
from doing so further and quite
member of the Legal
possibly a claim for damages
Committee of the bfa and co-author of
from their franchisor for any
several books on franchising. Contact him
damage to that franchisor’s
on +44 (0)1727 832830 or email
reputation. ■ mgi@ sherrards.com
www.businessfranchise.com June 2008
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121