A recent case1 has highlighted the courts reluctance to intervene in â€œrewritingâ€ RCâ€™s to make them enforceable. This means it is even more important to ensure that your RCâ€™s are reasonable.
RCâ€™s â€“ the Law
The general rule is â€“ a franchisor has a legitimate right to protect its interests in the territory where its franchisees operate â€“ i.e. when a franchise comes to an end for a reasonable period of time the franchisor can prevent the former franchisee from competing with the incoming franchisee, and from poaching staff and/or employees etc.
What is reasonable? Read on…