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02 September 2022 / Emily Sadler , Louis Iveson
Issue: 7992 / Categories: Features , Commercial
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After the ‘Drain Doctor’—restrictive covenants in franchising

Emily Sadler & Louis Iveson explain why franchisors should review their agreements following a recent judgment
  • Post-termination restrictive covenants in franchising agreements may not be as enforceable as once thought.
  • Practitioners acting for franchise clients (both franchisors and franchisees) should consider the impact of this judgment and how it might change the advice given in light of it.

On 30 June 2022 the Court of Appeal laid down its judgment in Dwyer (UK Franchising) Ltd v Fredbar Ltd and Shaun Bartlett [2022] EWCA Civ 889, [2022] All ER (D) 11 (Jul) in which they dismissed Dwyer’s appeal against an earlier High Court decision which ruled that the post-termination restrictive covenants in its franchise agreement were unenforceable.

This ruling is of crucial importance for franchisors using standard form agreements with its franchisees, but particularly so where the franchisee is an inexperienced individual. The judgment has dismissed the widely-held belief that a 12-month restrictive covenant will generally be enforceable upon a franchisee provided that the restricted activities and geographic

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NEWS
The government has pledged to ‘move fast’ to protect children from harm caused by artificial intelligence (AI) chatbots, and could impose limits on social media as early as the summer
All eyes will be on the Court of Appeal (or its YouTube livestream) next week as it sits to consider the controversial Mazur judgment
An NHS Foundation Trust breached a consultant’s contract by delegating an investigation into his knowledge of nurse Lucy Letby’s case
Draft guidance for schools on how to support gender-questioning pupils provides ‘more clarity’, but headteachers may still need legal advice, an education lawyer has said
Litigation funder Innsworth Capital, which funded behemoth opt-out action Merricks v Mastercard, can bring a judicial review, the High Court ruled last week
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