Fieldfisher LLP

London

Fieldfisher is a European law firm with market leading practices in many of the world's most dynamic sectors. Our growing European network of offices supports an international client base, and we are also servicing clients in the US and China through our offices in those markets. Among our clients we count global consumer brands, banks and government departments, as well as energy suppliers and life sciences companies.

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Updates

Corporate & Commercial

Good faith and relational contracts
United Kingdom | 18 November 2019

In two recent cases, the English courts considered whether the duty of good faith should be implied into commercial contracts. These cases demonstrate that the issue of good faith is evolving in English law. Parties to relational contracts must therefore monitor developments to ensure that foreseeable risks are mitigated effectively in their contracts and commercial practices.

Franchising

Guide to international expansion in the education sector – part two
International | 03 November 2020

School closures, social distancing, remote learning and a reduction in international travel and student exchange for the foreseeable future are all placing a significant strain on businesses in the education sector. Nevertheless, with every crisis comes opportunity. For the education sector, international expansion will be an important way of securing long-term financial viability through the creation of new revenue streams and the development of new edtech innovations.

Podcast: how to prepare your business for franchising
United Kingdom | 06 October 2020

In the wake of the COVID-19 pandemic, the franchise model will play an important role in economic recovery, helping individuals to take their first steps into business ownership, presenting opportunities to established operators to grow their portfolios and enabling brand owners to expand and regain or grow their market share. This podcast explores the key legal considerations for any business which is preparing to franchise.

European Commission's VBER review – what does it mean for franchising?
European Union | 15 September 2020

The EU Vertical Block Exemption Regulation will expire on 31 May 2022 and the European Commission is reviewing its effectiveness to determine whether it should lapse, its duration should be prolonged or it requires revision to take account of market developments since 2010 (most notably with regard to online sales and online platforms). This article explores the process so far and examines what this review means for franchising.

IP Enterprise Court considers interplay of EU Trade Secrets Directive and breach of confidence for first time
United Kingdom | 02 June 2020

The IP Enterprise Court recently considered the impact of the EU Trade Secrets Directive on the law of breach of confidence – in particular, in the context of ex-employees who sought to franchise their services. The case confirms the limited impact of the directive on the pre-existing law on breach of confidence. However, it also indicates that the directive can be useful in helping to tease out the distinctions between confidential and non-confidential information.

Proposed changes to insolvency regime and what they mean for franchisors and suppliers
United Kingdom | 05 May 2020

In response to the COVID-19 crisis, the government has stated that new tools will be added to the UK insolvency framework, including a moratorium for companies to give them "breathing space from creditors enforcing their debts while they seek a rescue or restructure". The government is also expected to introduce a moratorium provision, introduce an exclusion of ipso facto clauses and suspend temporarily wrongful trading provisions. This article considers what the changes would mean for franchisors.

Retention of title – how can franchisors and suppliers best protect claims against insolvent companies?
United Kingdom | 28 April 2020

In the wake of the economic turmoil caused by the COVID-19 crisis, a number of high-profile brands in the leisure and hospitality sectors have entered or will soon enter into formal insolvency processes. Although failure rates among franchises are typically lower than among non-franchised businesses, franchising will not be immune to this trend. It is therefore important that franchisors and suppliers ensure that they have the contractual rights to act quickly and effectively if the need arises.

Recent changes to IP licensing provisions – what franchisors need to know
United Kingdom | 21 April 2020

In 2019 the new EU Trademarks Directive was implemented in the United Kingdom. As part of this implementation, numerous changes were made to the licensing provisions of the Trademarks Act. This article sets out the changes which are most significant for franchisors, including limited direct enforcement rights for non-exclusive licensees and enhanced direct enforcement rights for exclusive licensees.

COVID-19: how franchise and distribution networks can respond
United Kingdom | 31 March 2020

There is no one-size-fits-all plan for how businesses should respond to the COVID-19 crisis. However, this article provides some guidance for businesses which are primarily consumer focused and use franchise and distribution networks to sell their products and services in order to help them to respond to the challenges ahead and hopefully even emerge on a stronger footing than before.

Guide to international expansion in the education sector – part one
United Kingdom | 17 March 2020

A British education is internationally regarded as the gold standard, as reflected in the dominance of British international schools. Done correctly, the execution of a school's international franchising strategy can become a core asset. However, the most appropriate structure must be determined at the outset, as restructuring an international licence is a complex, costly and time-consuming exercise.

Franchising, Brexit and trademarks – what now?
United Kingdom | 18 February 2020

The UK Intellectual Property Office (UKIPO) recently published a short, reassuring update about what happens to IP rights during the transition period following the United Kingdom's departure from the European Union. The UKIPO has assured that it will be business as usual, but there are some key points of which franchisors should take note.

It's a wrap – what lessons can franchisors learn from Wrapchic's demise?
United Kingdom | 17 December 2019

Wrapchic, which fell into administration in 2019 after shareholders refused to lend further funds as it continued to make losses, is one of a number of recent casualties in the UK food and beverage sector. However, unlike some of the more high-profile casual dining brands that have suffered a similar fate, Wrapchic was almost entirely franchised and operated in the generally more resilient quick service restaurant segment of the sector. So why did it fail and what lessons can franchisors learn?

Good faith and relational contracts: impact of recent decisions on franchisors
United Kingdom | 19 November 2019

English law has traditionally resisted implying the obligation of good faith into commercial contracts, except in limited circumstances. However, in a growing line of authorities (of which two recent cases are particularly significant), the English courts have confirmed that a duty of good faith will be implied into certain types of agreement as a matter of law. This article considers the ramifications of these decisions for parties to this special category of commercial agreement, which includes franchise agreements.

Keeping your trade secrets safe – EU perspective for franchisors
European Union | 15 October 2019

The EU Trade Secrets Directive seeks to harmonise the protection of trade secrets in all EU member states. In general, the implementation of the directive is positive for franchisors, as the protection of trade secrets and confidential information is key to the success of a franchise system. Although franchisors may be able to rely on the statutory definition of 'trade secret' set out under the directive, they should nonetheless continue to ensure that their confidential information is safeguarded contractually.

Economic duress and franchising: when does a threat not to enter into a contract amount to economic duress?
United Kingdom | 27 August 2019

In a recent case, the Court of Appeal considered whether a threat not to enter a contract could amount to economic duress, holding that it would not unless the threat was made in bad faith. While the decision provides useful and comforting guidance for franchisors, it also serves as a reminder to review contractual terms and processes and ensure that they are both robust and fair, as there is a fine line between protecting the integrity of the network and abusing a position of power.

Managing supply chain risk in franchise systems – proposed changes to insolvency regime
United Kingdom | 11 June 2019

Against the backdrop of a number of high-profile business failures in the UK retail sector, the government has issued a report on the insolvency regime, which will affect the operation of termination rights in supply agreements. This article considers the proposals and provides a best practice recommendation for recovering goods in the possession of a franchisee once they have entered some form of insolvency protection.

Be careful of 'non-reliance' clauses in franchise agreements
United Kingdom | 02 April 2019

In a recent Court of Appeal case, a landlord was unsuccessful in its appeal against a first-instance decision that a 'non-reliance' clause in a lease had attempted to exclude liability for misrepresentation. The decision, which will have ramifications for franchise agreements, demonstrates that such clauses must be fair and reasonable and have regard to the circumstances which were or ought reasonably to have been known to or contemplated by the parties when the contract was made.

Legalities of franchising in the United Kingdom
United Kingdom | 05 February 2019

Franchisors expanding into the United Kingdom need a thorough knowledge of any UK rules and regulations which may affect them, particularly in a post-Brexit Britain. Understanding the risks and issues and managing those risks through effective structuring and enforceable legal contracts will enable international franchisors to reap the rewards of doing business in one of Europe's largest and most dynamic markets.

Misrepresentation in franchising – important lessons from recent High Court case
United Kingdom | 16 October 2018

Four former Vision Express franchisees were recently successful in their claim against their franchisor, in which they alleged that they had been induced to enter into their franchise agreements on the basis of false information provided by a Vision Express employee. The case highlights the importance of ensuring that a franchisor's employees stay on message during the sales process and information which is provided to prospective franchisees is scrutinised to ensure its accuracy and relevance to the investment.

Don't forget to renew those vows – the franchise marriage
United Kingdom | 26 June 2018

Franchise relationships are rarely life-long commitments; most will be for a fixed term with a right to renew. The renewal process provides an opportunity for both parties to re-assess and recalibrate the relationship, as well as to settle any issues before either renewing their vows or deciding to go their separate ways. This all makes good commercial and legal sense; however, it is surprisingly common that the renewal process is not always followed.

Don't count your chickens before they hatch – takeaways from KFC's supply chain issues
United Kingdom | 01 May 2018

The recent KFC chicken supply crisis highlights the importance of supply chain management and illustrates how parties that rely on the functioning of a supply chain must protect themselves from a contractual and legal perspective. It also offers franchise businesses an opportunity to review the management and procurement of their supply chains, as well as the terms which govern their upstream relationships with third-party manufacturers and suppliers and their downstream relationships with franchisees.

Five cases from 2017 and what franchise businesses can learn from them
United Kingdom | 20 February 2018

The year 2017 was relatively quiet for franchise disputes in the English courts. Nevertheless, five cases involving franchise and distribution relationships provide some lessons for businesses. They highlight, among other things, the need for clear contractual provisions over ownership of customer data and the importance of businesses checking whether there are prior rights when seeking to register their mark.

Autumn Budget 2017 – what does it mean for franchising?
United Kingdom | 12 December 2017

Chancellor of the Exchequer Philip Hammond recently delivered the Autumn 2017 Budget, the first budget in the new annual tax policy-making cycle. Although there were no radical policy changes, some changes will affect the UK franchise business sector, particularly with regard to the tax treatment of royalties, corporate tax and the digital economy, environmental tax, value added tax and business rates.

Franchising and the gig economy – risks and rewards
United Kingdom | 19 September 2017

A number of businesses which franchise will interact with the gig economy, particularly those which operate with a low entry threshold, such as contract cleaning and other service-based franchises. Both franchisors and franchisees in these sectors may have individuals working for them in this capacity, so they must be aware of existing issues and the regulations that will likely be introduced.

New payment practices regulations and the implications for franchise businesses
United Kingdom | 11 July 2017

The Payment Practices and Performance Regulations 2017 require large UK businesses to report publicly twice yearly on their payment practices and performance. Large franchisors must ensure that they comply with this new regime. For franchise businesses which fall below the reporting threshold, the regulations are good news, as they are designed to improve and promote transparency and fairness in supply chain management.

New Code of Ethics for Franchising – but how much is new?
United Kingdom | 09 May 2017

The European Franchise Federation (EFF) recently adopted a new version of the European Code of Ethics for Franchising. The updated code aims to address some of the perceived imbalances and inequities in the franchise relationship and bring self-regulation into the digital age. However, although the British Franchise Association's (BFA's) interpretation of the code may include some variations from the EFF's text, much of the BFA's existing code and its practices are already in line with these updates.

Preparing for Brexit: top five considerations for franchisors in 2017
United Kingdom | 28 February 2017

Recent events have given the first real insight into the Brexit process. Franchise businesses should start preparing for the potential impact of Brexit by auditing their IP rights in the European Union and assessing their key contractual relationships with suppliers and franchisees. Preparations for the General Data Protection Regulation should continue and a watchful eye should be kept on events as they unfold.

Bad hair day: High Court enforces restrictive covenants against former hair salon franchisee
United Kingdom | 29 November 2016

The High Court recently considered whether two restrictive covenants relating to non-solicitation and non-competition imposed by an individual seller of a hair salon franchise in a share purchase agreement were enforceable. The judgment serves as a useful and informative discussion on a number of legal principles, such as contractual interpretation, restraint of trade and the enforceability of restrictive covenants.

Consumer credit and franchising: are your franchise agreements compliant?
United Kingdom | 16 August 2016

Many franchise systems require franchisees to use specific types of equipment. In order to keep start-up costs to a minimum and enable franchisees to focus their resources on delivering the required products and services, franchisors might make the equipment available under a hire arrangement. However, franchisors must bear in mind that this activity may be regulated by the consumer credit regulatory regime and that the consequences of non-compliance can be severe.

Changes to penalty clauses rule: implications for franchising
United Kingdom | 01 March 2016

In a recent landmark decision, the Supreme Court considered the long-established principles underlying the law relating to contractual penalty clauses. The judgment sets out a new, progressive test for determining whether a contractual provision will be considered penal (and therefore unenforceable), and has major implications for drafting, negotiating and enforcing English law franchise agreements.

Good news for franchisors: proposed reform of energy tax and reporting schemes
United Kingdom | 01 December 2015

The government recently published a consultation regarding the reform of the energy tax and reporting schemes in the United Kingdom. One key proposal is to abolish the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) and the climate change levy in favour of a single consumption tax. This will be of interest to UK franchisors, whose networks may be subject to the CRC.

Franchisors beware: standard-form limitations of liability under Unfair Contract Terms Act
United Kingdom | 22 September 2015

The High Court recently called into question the reliability of exclusion clauses in standard-form business-to-business contracts by applying the Unfair Contract Terms Act. The ruling serves as a timely reminder to franchisors that reliance on these types of exclusion and limitation cannot be taken for granted and that their enforceability will ultimately be judged against the Unfair Contract Terms Act 'reasonableness' test.

Being part of the crowd: mini-bonds and crowdfunding for franchise growth
United Kingdom | 14 July 2015

Restricted access to traditional sources of funding in recent years has seen a growth in alternative finance sources for new franchise businesses and ventures – in particular, mini-bonds and crowdfunding. These offer the franchise sector a real opportunity for growth, but it is important that both the franchisor and franchisee appreciate how these alternative financings work and the potential consequences of using them.

Construction of clause defining term of franchise agreement
United Kingdom | 12 May 2015

A recent Court of Appeal case regarding the termination of a franchise agreement highlights the importance of ensuring that franchise agreements, as well as any updates or amendments to them, are properly documented. In particular, lengthy common law franchise agreements require careful drafting and review to ensure that the insertion of a new clause does not contradict other standard provisions.

Good faith in franchising – where are we now?
United Kingdom | 03 March 2015

A number of recent cases have reignited the debate over whether English law recognises a general duty of good faith in commercial contracts, including franchise agreements. This update considers the line taken by the courts in these cases, starting with Yam Seng Pte Limited v International Trade Corporation and concluding with the first post-Yam Seng case for good faith in the context of franchising.

Competition authorities gear up to scrutinise franchise networks
United Kingdom | 04 November 2014

The 2013 decision of the Competition and Markets Authority (CMA) to fine Mercedes-Benz and five of its dealers over £2.8 million for infringing UK competition law serves as a reminder that franchisors and their networks may infringe the competition rules. The level of the fine imposed also demonstrates that the CMA is paying closer attention to the activities of small and medium-sized enterprises.

Restrictive covenants in franchise agreements
United Kingdom | 14 October 2014

Restrictive covenants are common in franchise agreements, seeking to protect goodwill and customer relationships by limiting the licensee's right to operate a competing business. Two recent cases in the English courts have considered the enforceability of restrictive covenants. This update considers the background of restrictive covenants in the context of franchising and discusses the implications of both judgments.

New consumer protection rights – is your franchise compliant?
United Kingdom | 22 July 2014

In a bid to increase consumers' awareness of their rights and provide greater protection, new regulations recently entered into force which implement certain elements of the EU Consumer Rights Directive. Franchisors need to ensure that their legal compliance programmes and those of their franchisees, including any related consumer terms and conditions, are in line with the revised requirements.

Running a legally compliant advertising campaign in a franchise network
United Kingdom | 18 February 2014

Franchisors can reap significant benefits from a successful advertising campaign – in terms of both attracting potential franchisees and gaining new customers or increased sales. However, a poorly conceived or executed campaign can not only reduce goodwill, but also prove costly to remedy. Therefore, it is important to ensure that marketing campaigns comply with relevant advertising laws and regulations.

Franchise agreements and the duty of good faith: is the genie out of the bottle?
United Kingdom | 24 September 2013

Judgments in three recent cases have reignited the debate over whether English law recognises a general duty of good faith in commercial contracts, including franchise agreements. Franchisors and distributors should be aware of these developments and take caution before exercising contractual discretion, while bearing in mind that their longer-term relational contracts may be held to a high standard of performance, including a duty to disclose.

Tech, Data, Telecoms & Media

Data protection post-Brexit: a game of 3D chess
United Kingdom | 14 February 2020

The year 2019 was one of high-octane political drama for the United Kingdom, culminating in its withdrawal from the European Union. While there was no cliff edge on 31 January 2020, there are significant challenges ahead, including in the cross-cutting area of data protection, which could affect many UK businesses.