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October 12th, 2021

Uk Franchise Agreement

What are the consequences of a franchisee`s infringement of the franchisee`s intellectual property, know-how or trade secret rights and what remedies does the franchisee have in this regard? Franchisors must be vigilant, because there are risks. Granting each franchisee a clearly defined exclusive geographic area and being aware of the geographical limitations of franchised sales documentation is one way to reduce this risk. The franchisee`s risk profile would be seriously affected if the franchisee were considered a “sales representative” within the meaning of the Council Directive Regulations 1993 (as amended). The pyramid scheme legislation in Britain has a specific application to franchising. This legislation applies to certain multi-layer franchisees, with the franchisee being encouraged (by the promise of a benefit or payment) to appoint subcontractors (who may in turn designate other subcontractors) to promote and sell goods and/or services. A violation of the pyramid scheme law can be a misdemeanor. Pyramid scheme legislation does not apply to a one-tier trading system (franchisors and a below level of franchisees). In addition, the UK government passed a new data protection law in 2018. The Act covers the application of the GDPR in the UK, including (i) the implementation of certain derogations under the GDPR negotiated by the UK Government; (ii) the application of the new data protection standards to all areas, not just to areas of EU competence; and (iii) repeal the Data Protection Act 1998 to avoid inconsistencies with the GDPR. It is therefore important that the GDPR and the DPA are read side by side in 2018.

It should be taken into account that, for the first time, unlike the previous Data Protection Act of 1988, which only regulated “data controllers”, the GDPR directly regulates “subcontractors”, since franchisors have a personal interest in a franchisee`s customer database for a range of valid business reasons. .

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