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ARTICLE · 27 MARCH 2006

Franchise Up-date: Guidance For Franchisors

DLA Piper Australia
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Raine & Horne’s recent successful claim in the Supreme Court of New South Wales offers some reassurance and guidance to franchisors about restraint of trade clauses in their franchise agreements.

AustraliaLitigation, Mediation & Arbitration

Article by Farzanah Ally and Tony Conaghan

Restraints of trade

Raine & Horne’s recent successful claim in the Supreme Court of New South Wales offers some reassurance and guidance to franchisors about restraint of trade clauses in their franchise agreements.

In this instance, a Raine & Horne franchisee, Adacol, signed a new franchise agreement with Ray White while still a franchisee under the Raine & Horne franchise agreement. At the same time, Adacol commenced trading and advertising as a Ray White franchisee in the same premises that it previously operated as a Raine & Horne franchisee.

Raine & Horne then terminated its franchise agreement with Adacol and sought orders enforcing certain provisions of the franchise agreement, in particular the restraint of trade clause. The restraint of trade provided that:

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