Keeping a Well-Known Restaurant Franchise Out of Court

Timely intervention and mediation kept a restaurant business going and helped it to grow.

Challenge

Asserson was instructed by the Israeli franchisee of a world famous international restaurant chain. The franchisee was subject to an LCIA claim for a mandatory injunction, damages worth over $15 million, and forfeiting the franchise agreement to run 50 restaurants. The franchisee was subject to a franchise agreement which contained onerous terms which were generally very restrictive and damaging to its business.

Inspiration

Asserson successfully prevented an interim injunction being obtained by the franchisor and submitted a comprehensive defence to the claim. By proposing early mediation, the litigation process which threatened to overwhelm and destroy our client’s business, was stopped, and then reversed. A tough interim agreement was reached, enabling our client to gain a dominant position in the negotiations, and preventing progress of the litigation in the interim.

Result

Using leverage gained by the interim agreement, Asserson’s client, the franchisee, persuaded the claimant franchisor to abandon Israel for 5 years; to allow Asserson’s client to double in size by amalgamating with another chain, thus enabling it to build a dominant position in the territory; and dropped the litigation.