In response to the COVID-19 crisis, the government has stated that new tools will be added to the UK insolvency framework, including a moratorium for companies to give them "breathing space from creditors enforcing their debts while they seek a rescue or restructure". The government is also expected to introduce a moratorium provision, introduce an exclusion of ipso facto clauses and suspend temporarily wrongful trading provisions. This article considers what the changes would mean for franchisors.
In the wake of the economic turmoil caused by the COVID-19 crisis, a number of high-profile brands in the leisure and hospitality sectors have entered or will soon enter into formal insolvency processes. Although failure rates among franchises are typically lower than among non-franchised businesses, franchising will not be immune to this trend. It is therefore important that franchisors and suppliers ensure that they have the contractual rights to act quickly and effectively if the need arises.
In 2019 the new EU Trademarks Directive was implemented in the United Kingdom. As part of this implementation, numerous changes were made to the licensing provisions of the Trademarks Act. This article sets out the changes which are most significant for franchisors, including limited direct enforcement rights for non-exclusive licensees and enhanced direct enforcement rights for exclusive licensees.
There is no one-size-fits-all plan for how businesses should respond to the COVID-19 crisis. However, this article provides some guidance for businesses which are primarily consumer focused and use franchise and distribution networks to sell their products and services in order to help them to respond to the challenges ahead and hopefully even emerge on a stronger footing than before.
A British education is internationally regarded as the gold standard, as reflected in the dominance of British international schools. Done correctly, the execution of a school's international franchising strategy can become a core asset. However, the most appropriate structure must be determined at the outset, as restructuring an international licence is a complex, costly and time-consuming exercise.