When Is A Franchisor Unreasonable To Withhold Consent Under A Franchise Agreement?
It is common for certain rights of a franchisee under a franchise agreement to be exercisable only if the franchisor gives its consent, such consent "not to be unreasonably withheld". Examples of such rights might be in relation to the change of a key person; change of the franchisee's trading location; change in the franchisee's corporate structure; or a sale or assignment of the franchisee's business.
Historically, there has been little guidance from the English courts as to what constitutes unreasonable withholding of consent in a franchise agreement (or indeed in any commercial contract). However, in the case of Porton Technology Funds and others v 3M UK Holdings Limited and another EWHC 2895 the...
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