Dwyer (UK Franchising) Ltd v Fredbar Ltd & Anor (Rev1) [2022] EWCA Civ 889 (30 June 2022)

Dwyer (UK Franchising) Ltd v Fredbar Ltd & Anor (Rev1) [2022] EWCA Civ 889 (30 June 2022)

The restrictive covenants in the franchise agreement were unenforceable because they were unreasonable in scope and effect, given the circumstances of the parties, the lack of negotiation, the franchisee's inexperience, and the excessive breadth of the restrictions. The Court upheld the High Court's analysis that the covenants did not strike a reasonable balance between protecting the franchisor's interests and the franchisee's right to work, and that the unreasonable parts could not be severed to save the remainder.

Citation
[2022] EWCA Civ 889
Parties
Appellant/claimant: DWYER (UK FRANCHISING) LIMITED; Respondent/defendant: FREDBAR LIMITED; Respondent/defendant: SHAUN ROWLAND BARTLETT
Jurisdiction
England and Wales
Judgment Date
30 June 2022
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal dismissed
Legal Topics
Restrictive Covenants, Franchise Agreements, Restraint of Trade, Inequality of Bargaining Power, Severance of Unreasonable Clauses
Contract Law Commercial Law Competition Law Restrictive Covenants Franchise Agreements Restraint of Trade Inequality of Bargaining Power Severance of Unreasonable Clauses

Case Brief

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Parties

DWYER (UK FRANCHISING) LIMITED

Appellant/claimant

FREDBAR LIMITED

Respondent/defendant

SHAUN ROWLAND BARTLETT

Respondent/defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Are the post-termination restrictive covenants in the franchise agreement between Dwyer and Fredbar/Mr Bartlett enforceable?
  2. 2 Did the High Court judge err in considering certain factors when assessing reasonableness?
  3. 3 Can any unreasonable part of the restrictive covenant be severed to save the remainder?

Ratio Decidendi

The restrictive covenants in the franchise agreement were unenforceable because they were unreasonable in scope and effect, given the circumstances of the parties, the lack of negotiation, the franchisee's inexperience, and the excessive breadth of the restrictions. The Court upheld the High Court's analysis that the covenants did not strike a reasonable balance between protecting the franchisor's interests and the franchisee's right to work, and that the unreasonable parts could not be severed to save the remainder.

Court Disposition

Appeal dismissed

Orders

  • The restrictive covenants in the franchise agreement are declared unenforceable between Dwyer and Fredbar/Mr Bartlett.
  • No order for severance of the covenants.