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Franchisors raising money to fight franchisees in the High Court.

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Micmarcmm	Franchisors raising money to fight franchisees in the High Court.		Lead	[-]
Posts: 30 27-Feb-2008 13:10:04 Forum Administrator	A recent finding in the Court of Appeal (Ketchell v Master Education Services) held that where a franchisor does not have a written acknowledgment that a franchisee has received, read and had an opportunity to understand the disclosure document, the franchise agreement is unlawful and unenforceable. This may prove to be a massive problem for franchisors. The Franchise Council of Australia have made a submission in support of the application for leave to appeal. Why? Because they (FCA) don't agree with the Supreme Court finding that a technical breach of the type in question should necessarily invalidate the whole agreement. Watch this space ....
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Micmarcmm		#1	[url]	[-]
Posts: 30 1-Mar-2008 18:03:31 Forum Administrator	The Franchise Council of Australia (FCA) may be likely to fund the appeal in the Kretchell case (see above post) ALONE . This means ponying up about $400,000 to test the judgment. That's a substantial amount of money. See the article The implications of this may be somewhat negative for the FCA. It would appear that this decision may define the "team" that the FCA plays for, and it may diminish it's status in the eyes of Franchisees (or at least franchisees perception of the ability/ commitment of the FCA to act in their interests). From a strategic-positioning perspective it will be interesting to see how the FCA manages the perception that arises from its decision. Last Edited By: Micmarcmm 3-Mar-2008 18:53:50. Edited 6 times.
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Micmarcmm	It's all over - Franchisors 1. Franchisees 0	#2	[url]	[-]
Posts: 30 11-Sep-2008 14:43:38 Forum Administrator	Yep. The High Court has decided that a technical breach of the Franchising Code (such as the one in this case), does NOT automatically render the Franchise Agreement null and void. Whilst this may (on the face of it) appear to be "against" franchisees, it really is a logical approach to ensuring that there is some certainty. It would be a nightmare for all parties if any one party could claim that an Agreement is null & void based on a technical breach of the process that resulted in that Agreement. If such a situation existed, Franchisees may find it really difficult to sell a franchise because a potential purchaser may never know if such a breach was made in the past, resulting in the prospect of the Agreement being "pulled" from under him (by the franchisor) after he purchased. So, whilst the "game" was lost by the Franchisees, perhaps it is for the best. A win may have been a Pyrrhic victory. Michael Marcus - The Franchisees Advocate Group Saving Franchisees. Assisting Independent Business. BEFORE it's too late! The Franchisees Advocate Group
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