Important Franchising update

Posted 10/07/2014

The High Court has today handed down judgment in what may prove to be one of the most significant franchising decisions of recent years. In Carewatch Care Services Ltd v Focus Caring Services Ltd & Ors [2014] EWHC 2313 (http://www.bailii.org/ew/cases/EWHC/Ch/2014/2313.html) Mr Justice Henderson had to decide a number of issues arising from a dispute between Carewatch and one of its franchisees. We will be producing a full analysis of the decision shortly, but the key points in the judgment include:

• No duty of good faith was implied by the Court into franchise agreements as a matter of principle, despite the Court having the opportunity to do so;

• The defendants tried to imply a wide range of different terms into their franchise agreement. The court reaffirmed the position that common law implied terms would only be implied into a franchise agreement if the usual, strict tests at common law are met (and they were not met in this case);

• A wide discussion of the application of the “Pronuptia” defence to an argument about restrictive covenants and competition law;

Our full analysis will be available shortly. However, if you would like to discuss the Court’s decision, or any of the points highlighted above, please do not hesitate to contact us.