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Franchise relationships are built on trust, shared goals, and clear agreements. When that relationship breaks down, you need solicitors who understand how franchising works and can help you find the best way forward. We act for franchisors and franchisees across Wales and England, resolving disputes quickly and protecting what you’ve built.
Get a free, no-obligation chat with our disputes team, call us on 02920 829 100 or use our Contact us form.
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Franchise agreements are meant to create profitable, lasting partnerships. But circumstances change, expectations shift, and disputes arise. A franchisee might feel misled about earnings potential. A franchisor might discover brand standards aren’t being maintained. What started as a promising business relationship can quickly become adversarial.
At Darwin Gray, we help franchisors and franchisees navigate these difficult situations. We understand the commercial realities of franchising: the significant investment franchisees make, the brand protection franchisors need, and the network-wide implications when disputes aren’t handled properly.
Our approach is practical. We’ll assess your position honestly, explain your options clearly, and help you decide whether to fight, negotiate, or find a middle ground. Many franchise disputes are best resolved through mediation or negotiation, preserving relationships and avoiding the cost and publicity of court proceedings. When that’s not possible, we’re ready to litigate.
We also understand franchising from both sides. Acting for franchisors and franchisees gives us insight into how the other party is likely to think and what arguments they’ll make. That’s valuable when it comes to strategy.
Ready to discuss your dispute? Get a free, no-obligation chat with our disputes team, call us on 02920 829 100 or use our Contact us form.
When one party fails to meet their obligations under the franchise agreement, the consequences can be serious. We advise on breaches of performance targets, quality standards, payment obligations, territorial restrictions, and operational requirements, helping you understand your options and the risks involved.
Franchisees sometimes discover that the earnings projections, support promises, or market assessments they relied on when investing were overstated or misleading. We help franchisees pursue misrepresentation claims and advise franchisors on defending them.
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Ending a franchise relationship is rarely straightforward. We advise on the grounds for termination, notice requirements, and what happens to the business afterwards. Getting this wrong can expose you to significant claims for damages.
Franchise agreements typically include restrictive covenants preventing former franchisees from competing or soliciting customers after the agreement ends. We advise on the enforceability of these restrictions and help protect legitimate business interests on both sides.
Renewal terms can be a flashpoint for disputes. We help franchisees negotiate fair renewal conditions and advise franchisors on managing renewals across their network while maintaining consistency.
Disputes often arise when franchisees want to sell their business and franchisors exercise their rights over the transfer. We help both parties navigate the approval process and resolve conflicts over sale terms, incoming franchisees, or transfer conditions.
We’re the leading commercial law firm with offices in South and North Wales offering Welsh language legal services at every level. For franchise networks operating in Wales, or disputes involving Welsh businesses, our bilingual capability means we can work in the language that suits you best.
You won’t be passed through layers of gatekeepers here. When you call, you’ll speak to the solicitor handling your matter. You’ll have their mobile number, their email, and a genuine working relationship. In franchise disputes, where timing often matters, direct access means faster decisions.
We don’t work in silos. Franchise disputes often touch on employment issues, property matters, intellectual property, and corporate structures. Our team shares knowledge across departments and can bring in the right expertise without formal handovers or delays.
Devolved decision-making and flexible working hours mean we can move at pace. When a franchisor threatens termination or a franchisee stops paying royalties, you need advice quickly. We’re set up to respond when you need us.
Getting to know our clients properly matters to us. Face-to-face meetings, regular catch-ups, and genuine investment in understanding your business. Plenty of larger firms aren’t prepared to do that. We are.
You’ll always get the full picture from us. Clear options, each with its own risk level and cost implications, so you can make informed decisions. No sugarcoating, no hedging. Just practical, commercial guidance and high-quality legal work at a fair price.
Contact us and we’ll arrange a conversation, usually within 24 hours. We’ll discuss what’s happened, review the franchise agreement and key correspondence, and give you an initial view on your position. This conversation is free and without obligation.
Once we understand your situation, we’ll review the franchise agreement in detail and advise on your options. We’ll be clear about the strength of your case, the likely costs, and the realistic outcomes. Many franchise disputes are best resolved outside court, and we’ll tell you if that’s the case.
Most franchise agreements include dispute resolution clauses requiring negotiation or mediation before court proceedings. Even where they don’t, these approaches often achieve better outcomes faster and more cheaply. We’re experienced negotiators and have access to specialist franchise mediators.
If negotiation fails, we’ll advise on whether arbitration or court proceedings are the better route. Arbitration offers confidentiality, which matters in franchising where network reputation is at stake. Court proceedings may be appropriate for precedent-setting issues or where enforcement is straightforward.
Whether through settlement, arbitration award, or court judgment, we’ll help you implement the outcome and manage the practical consequences, including post-termination obligations, handover arrangements, and ongoing restrictions.
We understand that franchise disputes often arise at difficult times financially. Franchisees may be struggling with a business that isn’t performing as expected. Franchisors may be managing multiple issues across their network. We’re upfront about fees and will give you a clear estimate before you commit.
Funding options include:
Hourly Rates – For most franchise disputes, we work on an hourly rate basis with regular billing and clear cost updates. You’ll always know where you stand.
Fixed Fees – For defined pieces of work, like reviewing a franchise agreement and advising on termination options, we can often agree a fixed fee.
Conditional Fee Arrangements – In appropriate cases, particularly for franchisees with strong misrepresentation claims, we may be able to offer arrangements where some fees depend on success.
Legal Expenses Insurance – Check your business insurance policy. Many include legal expenses cover. We can help you make a claim on your policy.
Costs Recovery – If you win in court or arbitration, you may recover a significant portion of your legal costs from the other side. We’ll advise on likely outcomes as part of our assessment.
The team is totally focused on providing bespoke advice to clients in the most time efficient and cost-effective manner possible. Legal 500
The team is exceptionally responsive and provides excellent clear advice. Legal 500
Recent examples of franchise disputes that we have advised on include:
A franchise agreement is a contract between a franchisor (the business owner who has developed a brand and system) and a franchisee (who pays for the right to operate under that brand and system). It sets out the rights and obligations of both parties.
The agreement typically covers the territory the franchisee can operate in, the fees payable (usually an upfront franchise fee plus ongoing royalties), the standards the franchisee must maintain, the support the franchisor will provide, and what happens when the relationship ends.
Franchise agreements are almost always drafted by the franchisor and tend to favour them. They’re usually non-negotiable on key terms, although some provisions may be open to discussion. Before signing, franchisees should always have the agreement reviewed by a solicitor who understands franchising.
Unlike some countries, the UK has no specific franchise legislation. Franchise agreements are governed by ordinary contract law, competition law, and intellectual property law. The British Franchise Association sets ethical standards for its members, but membership isn’t compulsory.
Franchise disputes typically arise from a few recurring issues:
Misrepresentation – Franchisees may claim they were given misleading information about likely earnings, market conditions, or the support they’d receive. If a franchisee can show they relied on false statements when deciding to invest, they may be able to rescind the contract or claim damages.
Breach of agreement – Either party may fail to meet their obligations. Franchisees might not meet performance targets, maintain brand standards, or pay royalties on time. Franchisors might fail to provide promised support, training, or marketing.
Termination – Disputes often arise around termination, whether the grounds were valid, whether proper notice was given, and what the financial consequences should be.
Territorial issues – Conflicts over territory, including encroachment by other franchisees or the franchisor opening competing outlets, are common sources of dispute.
Renewal and exit – The terms on which agreements are renewed, or the restrictions that apply when a franchisee wants to sell or leave, frequently lead to disputes.
The franchise agreement will usually specify how disputes should be handled. Most require some form of alternative dispute resolution before court proceedings.
Direct negotiation is often the first step. Many disputes arise from misunderstandings or can be resolved through compromise. The British Franchise Association offers an informal conciliation service for its members.
Mediation involves an independent mediator helping both parties reach agreement. It’s confidential, relatively quick, and often successful. Research suggests around 92% of mediations result in settlement. The BFA operates a mediation scheme, and there are specialist franchise mediators available.
Arbitration is more formal. An arbitrator hears both sides and makes a binding decision. It’s confidential (important in franchising where network reputation matters) and the decision is enforceable. However, rights of appeal are limited.
Litigation through the courts is sometimes necessary, particularly where urgent injunctions are needed or where the dispute involves issues that should be decided publicly. It’s generally the most expensive and time-consuming option.
Courts and arbitrators now expect parties to have genuinely attempted alternative dispute resolution. Refusing to mediate unreasonably can result in costs penalties even if you win.
The consequences depend on whether the termination was lawful and what the franchise agreement says.
If the termination was wrongful (for example, without proper grounds or notice), you may be able to claim damages for the losses you’ve suffered. These could include your lost profits for the remainder of the term, your wasted investment, and other consequential losses.
If the termination was lawful, your options are more limited. The agreement will specify what happens to the business: typically you’ll need to stop using the brand immediately, return confidential materials and manuals, de-brand your premises and vehicles, and comply with any post-termination restrictions.
You may have the right to sell stock, goodwill, or the business itself, depending on the agreement terms. There’s no automatic right to compensation for goodwill you’ve built up, which is why understanding the agreement before you sign is so important.
If you’re facing termination, take legal advice immediately. Acting quickly can sometimes save the relationship or improve your negotiating position.
Franchise agreements typically include post-termination restrictions preventing you from competing with the franchise or approaching its customers for a period after the agreement ends. These are sometimes called restrictive covenants.
In principle, restrictions on trading are unenforceable as restraints of trade. But restrictions that protect legitimate business interests, and go no further than necessary to do so, can be enforced.
Courts will look at the specific wording, the scope (geographic and in terms of activities), the duration, and whether the restriction is reasonable given the franchisor’s legitimate interests. Restrictions of one to two years within a defined territory are often upheld; longer or wider restrictions may be challenged.
If you’re considering breaching a restriction, or want to challenge one, take advice first. Getting it wrong could expose you to an injunction and damages. Equally, if you’re a franchisor seeking to enforce restrictions, you’ll need to show they’re reasonable and that you have a genuine interest to protect.
Before committing to a franchise, you should:
Understand the costs – Not just the franchise fee, but ongoing royalties, marketing contributions, required purchases from approved suppliers, and the working capital you’ll need before the business becomes profitable.
Research the franchisor – How long have they been operating? What’s their financial position? Are they members of the BFA? Speak to existing franchisees about their experience.
Review earnings claims critically – Franchisors must be careful about earnings projections, but some sail close to the wind. Ask what the claims are based on and whether they’re typical or exceptional.
Check the territory – Is it exclusive? Can the franchisor open competing outlets or sell online into your area? What happens if the territory proves too small or too large?
Understand termination and exit – How long is the agreement? What are the renewal terms? On what grounds can either party terminate? What restrictions apply afterwards? Can you sell the business, and what approval is needed?
Get proper advice – Have the agreement reviewed by a solicitor who understands franchising. The cost is modest compared to your investment and could save you from a costly mistake.
Good franchisors minimise disputes through careful management and clear communication:
Use a robust franchise agreement drafted by lawyers who understand franchising and reviewed regularly. Ambiguous terms breed disputes.
Be honest in recruitment – Overpromising to get franchisees signed up leads to disappointed franchisees and misrepresentation claims down the line.
Provide genuine support – Deliver on training, marketing, and operational support promises. Franchisees who feel supported are less likely to become adversarial.
Communicate consistently – Regular contact helps spot problems early. Most issues can be resolved informally if caught quickly.
Apply standards fairly – Enforce brand standards and performance requirements consistently across the network. Inconsistent treatment breeds resentment.
Address problems early – Don’t let breaches fester. A prompt, proportionate response to minor issues prevents them becoming major disputes.
Have a clear dispute resolution process – Use tiered approaches: informal discussion, then mediation, then formal proceedings. Many disputes settle once both sides understand the other’s position.
The standard limitation period for contract claims is six years from the date of breach. For misrepresentation claims, it’s six years from when the representation was made, or three years from when you discovered (or should have discovered) the misrepresentation if that’s later.
Some franchise agreements include shorter limitation periods requiring claims to be brought within one or two years. These can be enforceable if reasonable.
Even within these time limits, you should act quickly. Evidence deteriorates, witnesses forget, and delay can weaken your position. Courts look unfavourably on parties who sit on their rights.
If you’re considering a claim, take advice early to understand the limitation position and ensure you don’t miss crucial deadlines.
Franchising has its own dynamics, industry practices, and typical contract terms. A solicitor who regularly acts in franchise matters will understand these nuances in a way that a general commercial lawyer might not.
Equally important is whether the solicitor understands your commercial objectives. Winning a legal argument isn’t helpful if it destroys a profitable business relationship or costs more than the dispute is worth.
At Darwin Gray, we combine franchise knowledge with a practical, commercial approach. We’ll tell you honestly whether your position is strong, what the realistic outcomes are, and whether fighting is worth it.
a: 9 Cathedral Road, Cardiff, CF11 9HA
t:Â 02920 829 100
Our Cardiff office is easily accessible and has client parking available. We advise franchisors and franchisees across South Wales and throughout England from here.
a: Unit F12, InTec, Ffordd y Parc, Parc Menai, Bangor, LL57 4FG
t:Â 01248 301 100
Our North Wales office serves franchise businesses in the region, with particular expertise in Welsh language matters where franchise networks operate bilingually.
We’re happy to meet at our offices, at your premises, or by video call, whichever works best for you.
Whether you’re a franchisor dealing with a difficult franchisee, or a franchisee who feels let down by your franchisor, we can help. We’ll give you an honest assessment of your position and practical options for moving forward.
Ready to discuss your dispute? Get a free, no-obligation chat with our disputes team, call us on 02920 829 100 or use our Contact us form.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
02920 829 100 
