Call us today0800 160 1298
 
 

Advantage Litigation

Welcome to Advantage Litigation Services. We provide affordable access to commercial litigation.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Team Blogs
    Team Blogs Find your favorite team blogs here.
  • Login
    Login Login form

Claiming compensation for breach of contract – franchisees vs franchisors

Posted by on in Uncategorized
  • Font size: Larger Smaller
  • Hits: 297
  • Subscribe to this entry
  • Print

There was a lot of coverage in the UK media back in March 2018 regarding the so called ‘great chicken crisis 2018’, where hundreds of KFC stores throughout the UK had to close because deliveries of chicken – the prime menu item on most KFC meals – failed to reach the stores. As most of these stores operate on a franchise basis, with the store owner being the franchisee and KFC being the franchisor, the question now being asked is can the stores be compensated for loss of earnings?

The problems with the failed deliveries stemmed from changes that KFC, the world’s second largest restaurant chain with over 20,000 locations globally, made to their delivery operation in the UK. KFC decided to use a new delivery contractor (DHL) to try to save costs in the management and fulfilment of its vital regular UK deliveries, but early problems from DHL’s side may have cost KFC and its franchisees over £1m a day in lost revenues. The GMB union has claimed that the problems stemmed from cost-cutting by DHL in trying to fulfil the deliveries from a single UK distribution centre.

Can KFC franchisees claim?

Whilst the extensive media coverage surrounding KFC’s problems will mean that KFC should compensate employees, many on zero-hours contracts, directly, the terms of the franchise agreement means that franchisees are not allowed to source ingredients & chicken from another supplier. With franchises with major global brands such as KFC costing up to £1million to buy and with a significant percentage of a revenues also being due, and with the terms of the franchise being so carefully locked down, what happens when a franchisee makes significant losses through no fault of their own?

Compensation – loss of earnings and breach of contract

As is often the case with such commercial agreements and contracts, the devil is in the detail. Such agreements, especially with such well established brands, should contain in-depth information regarding what happens in the event of a problem, who is responsible and what rights to compensation are included. Even with franchise agreements typically being drafted in significant favour of the franchisor, it is important to check the contract in detail to see if there are contractual grounds for compensation. There may also be indemnity clauses covering problems with ‘upstream’ suppliers (ie: other companies providing products or services to the franchisor), and there may be grounds for a breach of contract compensation claim.

If you need advice on how to make a cliam for loss of earnings or breach of contract, Advantage Litigation Services are here to help. Click here to contact us today or call 0800 160 1298.

Get in touch

  1. Your Name(*)
    Please let us know your name.
  2. Your Email(*)
    Please let us know your email address.
  3. Company Name(*)
    Please write a subject for your message.
  4. Your Phone Number
    Invalid Input
  5. Message(*)
    Please let us know your message.
  6. Anti-Spam, please enter the characters shown
    Anti-Spam, please enter the characters shown
    Invalid Input

Latest News

  • Nikolaj Coster-Waldau, one of the stars of the hit TV series ‘Game of Thrones’, is embroiled in a contract dispute with his former agent that could end up costing him up to $2 million. The 48 year old Danish actor, who plays the role of Jamie ‘The Kingslayer’ Lannister in the HBO fantasy series, has been ordered by a court in the USA to pay his former manager Jill Littman around $2 million, made up of around $1.75 million of that in back pay, plus about $225,000 in interest. The dispute is over a contract the actor had with Littman and her agency Impression Entertainment for a significant portion of hi Hollywood career, which has seen Coster-Waldau star in films including ‘Black Hawk Down’. The Emmy Award nominated actor terminated his professional relationship with Littman in 2015, stating in an email that: I... Read More

  • In a move that will be welcomed by many businesses both in mainland Europe and the UK, the recent Brexit draft withdrawal agreement contains a clause which means that EU trademarks and designs will continue to be valid once the UK formally leaves the EU (if it actually does, of course!). The clause in the withdrawal agreement, Article 54, confirms that subject to trademarks and IP being assigned to a specific owner before the end of the transition period, then such trademarks and designs will apply both in the EU and the UK.IP experts had expressed concerns prior to the confirmation of Article 54, led by the Intellectual Property Office who were acutely aware of the amount of legal and administrative work that would be involved in transferring thousands of rights. The clause will now mean that rights holders can be... Read More

  • Professional footballer Ched Evans is set to take legal action against his former lawyers in a claim for loss of earnings following his initial conviction at a rape trial. 29-year old Evans, who has also earned 13 caps at international level for Wales, faced trial for rape in 2012 where he was ultimately convicted, spending two and a half years in prison. Evans has always protested his innocence over the rape claim bought by a nineteen year old woman following from a drunken night at a hotel in Wales in 2011. On 21st April 2016, the former Sheffield United striker, currently playing on loan for League One Fleetwood Town, had his original conviction quashed by the Court of Appeal, and a subsequent and highly controversial retrial in October 2016 found him to be not guilty. Evans now intends to sue his... Read More