Legal Matters

All Articles


Legal Review 2023 – Stewart Germann and Khushbu Sundarji review three recent cases where franchisors and franchisees went to court seeking legal injunctions – and weren’t successful

Law Society's franchise agreement plan under fire

February 2011 - A plan by the Auckland District Law Society Inc to launch a standard format franchise agreement has drawn immediate fire from franchise specialists, with one prominent franchise lawyer calling it ‘inappropriate’ and ‘dangerous

The Right Side of The Law

December – 2022 Might some franchisors’ attempts to help their franchisees with financing, pricing or selling cause them to fall foul of some unexpected laws? Michael Bright investigates

No jabs franchisee loses business

27 January 2022 – A franchisee which advertised for unvaccinated staff despite the mandatory requirement for hospitality staff to be vaccinated has left the business after being fined $24,000 for breaching the mandate. The franchisor reportedly gave them 10 days to comply or leave

Rights & Wrongs

June 2020 – Stewart Germann and Khushbu Sundarji review lessons from three recent cases involving well-known New Zealand franchises.

Exploiting liquor store owners lose licences and franchise

27 September 2021 - Franchisors praised for taking a stand as former franchisee loses liquor licence after worker exploitation

Leases & Landlords

Paul Turner and Scott Goodwin of Goodwin Turner Commercial Lawyers offer some notes for franchisees regarding leases

Speaking terms - buying and selling a franchise

What happens to the franchise agreement when you buy or sell an existing franchise? Michael Bright provides a brief guide

Payroll problems could cost millions

19 November 2019 – McDonald’s has agreed to backdate miscalculated holiday pay for 10 years under an agreement with the Labour Inspectorate. It’s just one of many organisations, including the Police, that have been confused by complex legislation

The horrors of the Holidays Act

30 May 2018 - The Government has announced that it will review the Holidays Act 2003. This will be welcome news for franchises who are battling with compliance issues under the scrutiny of a Labour Inspectorate which announced last year it would be specifically targeting the franchise sector. The current massively-complicated Act makes it difficult to do the right thing no matter how hard employers try, as this article from November 2017 shows.

Employment issues: keeping franchises out of trouble

A Subway franchisee has made the company a ‘priority focus’ for Labour Inspectorate investigators. How can franchisors prevent a similar problem in their own networks?

Labour Inspectorate to target Subway franchisees

Updated 27 August 2019 – A Subway franchisee who failed to improve employment practices after a warning has made the company a ‘priority focus’ for investigators

Employment Law Changes - training material

The following material has been provided by Employment New Zealand to help business owners and franchisors understand the impact of the changes to employment legislation under the Employment Relations Amendment Act 2018, and to enable them to advise staff and franchisees accordingly.

Employment law changes - does your franchise comply?

January 2019 - The Employment Relations Amendment Act 2018 introduced a number of employment law changes that aim to improve fairness in the workplace and deliver decent work conditions and fair wages. The first changes came into effect in December 2018; the remainder will become effective in May 2019. Is your franchise prepared?

Joint employment status – latest

20 September 2018 - A proposed ruling from the USA on responsibility of franchisors for staff employed by franchisees could help influence international thinking on the issue

Wage cheat franchisees lose businesses

July 2018 – A franchisor has taken swift action against a franchisee found to have breached employment law

Criminalising cartels – how will it affect franchising?

23 February ­– New legislation amending anti-cartels legislation would mean franchises need to be more careful than ever to ensure proper compliance

Employment clampdown: penalties grow

26 February - Franchisors advised to ensure franchisees compliant as Labour Inspectorate investigations continue

Auckland franchisees repay $125,000 in missing wages

26 October – The Franchise Association and the Labour Inspectorate are urging franchises to check their systems after faulty payroll practices caused some Caltex franchisees to underpay hundreds of staff

Who owns the customers?
High Court declines franchisor's bid for interim injunction

31 March 2014 – The High Court has declined to grant an interim injunction restraining an ex-franchisee from continuing to trade following the expiry of the franchise agreement.

Employment fraud a risk for franchises

February 2017 - Employment issues continue to dog the franchise sector in Australia – are New Zealand franchisors prepared?

Franchise restraints: case-by-case approach means outcomes vary

October 2016 – Deirdre Watson shares three lessons on the most recent High Court cases involving restraints of trade and good faith in franchising

Don’t say it’s over -
leaving a franchise doesn't mean you can just carry on

June 2016 - Harshad Shiba reviews two recent cases involving well-known New Zealand franchises

Restraints position not all tied-up

Two recent cases before the High Court upheld the restraints of trade in franchise agreements. Can franchisors relax? Not necessarily, says barrister Deirdre Watson

Cartels Bill impact on franchising

June 2015 – A new law is possibly the most significant ever to have affected franchising in New Zealand, says barrister Deirdre Watson

New safety legislation adds
complications for franchises

December 2014 - Changes in health and safety could be costly for franchisors and franchisees, suggests Nathan Tetzlaff of Gaze Burt

Home services franchisor ditches brother, repays franchisees

10 June 2015 – Mr Green has responded to a series of negative articles by terminating a master licence agreement held by the franchisor’s brother

Follow the rules and stay out of trouble

March 2015 - Stewart Germann and Harshad Shiba review three recent cases with lessons for franchisees and franchisors

Who employs a franchisee's staff?

January 2015 - How far are franchisors responsible for the employment issues of franchisees? It's a hot topic overseas with major implications for New Zealand.

- how restraint of trade and IP issues affect former franchisees and imitators

Stewart Germann and Harshad Shiba review three legal cases in New Zealand which protected the value of a franchisor’s intellectual property

holding on to WHAT’S YOURS

March 2014 - Stewart Germann and Harshad Shiba review three legal cases which protected the value of a franchisor’s intellectual property

Green Acres restraint case' a win for franchising'

27 June 2014 - The CEO of Green Acres has hailed the result of an arbitration process with a former franchisee as a victory for the whole franchise sector.

Exiting franchisee and existing customers
- a complicated case

January 2014 - Ending a franchise relationship is often not a black and white exercise. Deirdre Watson details a case where a third party was drawn into a dispute over an attempt to poach customers.

RISK MANAGEMENT: what happens when it all goes wrong?

October 2013 - David Munn looks back at a high profile court case and analyses the risks associated with restraint of trade clauses in franchise agreements.

Delete the evidence, solicitor tells franchisee

A solicitor who encouraged a franchisee to be dishonest to avoid falling foul of a restraint of trade provision has had their name withheld

– the story of the gym franchise
and the franchisee who took down the signs

April 2013 - A dispute between Club Physical and a multi-unit franchisee was only resolved after a lot of publicity and a lot of legal fees

how do franchise disputes escalate
and what can you do to avoid it?

Jeff Giddings, Lorelle Frazer & Scott Weaven look at what drives franchisees and franchisors to damage their own systems during disputes

'HARSH CONSEQUENCES' for Club Physical franchisee as injunction granted

7 March 2013 - The application for interim injunctions against the Club Physical franchisee who rebranded three Auckland gyms without warning has been granted

No injunction till full trial in coffee copyright case

January 2013 - A coffee franchise seeking to protect its copyright has been told it has a strong case but must wait for a full trial. The franchise team at Davenports Harbour Lawyers report.

Proposed anti-cartel bill could increase compliance costs for NZ franchises

A draft bill before the Commerce Select Committee could see franchisors having to apply for exemption from laws designed to prevent collaborative activity among competitors, says FANZ

Court of Appeal upholds
on franchisee

August 2012 - A recent Court of Appeal decision has upheld the right of a franchisor to enforce a restraint of trade clause, but reduced the period applicable to just three months

handling disputes via media

June 2012 - Two franchise disputes have been featured on high-profile television programmes recently. Here, David Munn expands upon his comments in the latest issue of Franchise New Zealand magazine about what franchisors can and can’t do legally to protect their brand.

overseas franchisees call for GREATER PROTECTION

May 2011 - A US body called the Coalition of Franchisee Associations has called for the introduction of a ‘Bill of Rights’ for franchisees, while a new Australian body is also concerned for franchisee rights.

can you opt out of ARBITRATION?

December 2010 - A recent court case highlights the importance of arbitration clauses

Franchise agreements escape consumer law reform

Franchise agreements will not now be caught up in proposals by the Ministry of Consumer Affairs to reform consumer law. Originally, it was feared that some elements of consumer law might be extended into business-to-business standard form contracts, with suggestions that these might include clauses relating to unconscionable conduct and good faith.

Court of Appeal decision bolsters protection for franchisors

April 2010 - Last year’s judgement by the Court of Appeal that upheld the effectiveness of notices to franchise buyers that they should get their own specialist advice has been reinforced in another case.

False franchisors plead guilty

16 October 2009 - The Commerce Commission has welcomed the conviction and sentencing today of Stewart John Brown and Robert Llewelyn Parr

Five habits of highly successful franchisors

US law firm Faegre & Benson has suggested what it is that marks out great franchisors

Ice Cream Case Demonstrates Need for Trademark Protection

The story of the Mr Whippy who wasn’t reinforces the need to protect your franchise at all times.

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