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If you operate a franchise that is based around a service that is not unique, using equipment, knowl
In a recent case the judge indicated that, provided the restrictive covenant was “reasonable in terms of the public interest” and not unfair to the ex-franchisee in terms of time or area, then the franchisor was entitled to ensure that his investments were protected by ensuring that unfair advantage was not taken by an ex-franchisee on termination of the franchise. It may be that a judge would look at the service, equipment, knowledge and consumables referred to to establish whether this was a true franchise and may, indeed, be influenced by arguments that really the franchisor was not providing anything unique, so as to limit the franchisor’s ability to impose restrictive covenants or to limit the length of the restrictive covenants. But unless you were able to persuade a judge that really this wasn’t a franchise at all, I believe that the franchisor would be entitled to protection from competition from its ex-franchisee.
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