Update: Ketchell's Case

In our last hot topic we discussed the decision of Ketchell v Master Education Services in which the NSW Court of Appeal found that the Franchisor's failure to strictly comply with the requirements of regulation 11 (1) of the Code (requirement for the franchisee to provide signed written statements that it has received, read and had a reasonable time to understand the disclosure document and the Code) rendered the Franchise Agreement illegal and unenforceable.

The High Court has granted leave for the Franchisor to appeal the decision. However, before the appeal can proceed the franchisor is required to undertake to pay all of the franchisee's costs of the appeal. The franchisor has indicated that it is unable to fund the appeal.  However, given the potential impact of this decision on the franchising industry, the Franchise Council of Australia has agreed to fund the appeal. The Franchise Council has received some support from the industry but is still seeking further support so that the appeal can proceed.

We will keep you posted as more information comes to hand.

This article appears courtesy of Macpherson & Kelley Lawyers