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Kwik Kopy settles legal dispute with franchisees

Media release
11 December 2002

Kwik Kopy settles legal dispute with franchisees

Last week a dispute between Kwik Kopy Australia (KKA), and five former New Zealand franchisees was resolved to the full satisfaction of the franchisor and all claims brought against Kwik Kopy were withdrawn.

Under the settlement agreements, the four former franchisees must meet all their obligations under the franchise agreement.

The dispute arose after the four of the franchisees terminated their Franchise Agreements and then, in breach of their restraint clauses, continued to trade within the territory, from the same site but under a new trading name. A fifth franchisee, though relocating outside his restraint area, refused to pay outstanding franchise fees owing at the time of termination.

This settlement follows a recent judgement for another franchise group in New Zealand when the Privy Council ruled that a franchise agreement has long-term mutual obligations, similar to that of a joint venture, and that refusal of franchisees to participate in group activities is a breach of their contract.

“It is a great shame that the franchisees took this course of action. Had they cooperated with Kwik Kopy, by complying with their Franchise Agreement during their termination period, there is a real chance that they could have sold their profitable businesses and not incurred this considerable expenditure,” said Matthew Penfold, Managing Director, Kwik Kopy Australia.

“One of our leading franchisees commented to me that in situations like this our role as the franchisor is to protect the value of the brand and this is exactly what we have done. For Kwik Kopy Australia this complete vindication of our commitment to see the terms of the franchise agreement upheld is an impressive outcome,” he added.

Kwik Kopy Australia, the corporate print and design specialists, will now continue to focus on growing its business in New Zealand with its new ‘Be Impressive’ positioning.

ENDS

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