Can I stop a former franchisee or employee from setting up a competing business?
Restraint of trade clauses and confidentiality agreements are commonly used to prevent former franchisees or employees from engaging in activities that compete with the franchised business. However, recent Court decisions indicate pitfalls in inadequate confidentiality agreements and unreasonable non-compete clauses in Franchise Agreements / Employment Contracts. The decisions indicate that non-compete clauses will be enforced if reasonable and necessary to protect legitimate business interests.
About Katarina Klaric
Katarina Klaric is the Partner at Stephens Lawyers & Consultants. Katarina has over 20 years' experience in franchising and intellectual property law. She is a member of the FCA.She has set up franchise operations in Australia for both local and international companies.
You should always check independently that an ask an expert answer published on Franchise Business applies to your particular circumstances.
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