Saturday, October 15, 2011
THE holders of the master franchise for Pizza Hut’s delivery services through Ireland have secured a High Court injunction preventing Pizza Hut’s US-based parent terminating that agreement.
Q Co Franchising Ireland Ltd, owned and operated by brothers John and Patrick Cronin, secured orders from Mr Justice Michael Hanna including an injunction compelling Pizza Hut International LLC not to terminate franchise agreements purportedly terminated earlier this month, pending a full hearing.
Q Co, which has more than 35 Pizza Hut delivery franchises in Ireland, claims the parent company is not entitled to terminate the master agreement.
Pizza Hut International argue that Q Co owes €1 million and urged the court not to grant the injunctions.
In his ruling yesterday, Mr Justice Hanna said he was prepared to grant the injunctions on grounds including that Q Co had made out that there was a fair issue to be tried.
The judge said that at the centre of this dispute was a claim by Q Co the parent company would not seek royalty payments from his clients for 12 months from December 2010 and November of this year, and have waived the arrears that had accrued.
The parent company, he noted, disputed this claim so the issue could only be resolved at a full hearing.
The judge also stated the balance of convenience favoured granting the injunctions. Q Co had claimed it would go out of business if the injunctions were not made.
Business, the judge said, was not like a marriage, where the courts could not force a couple in dispute "to cohabit". But the courts, he added, could coax business partners into some commercial arrangement until matters were finally resolved.
Mr Hanna said any loss suffered by the parent company as a result of the injunctions being granted could be remedied if the case obtained an early hearing date.
Q Co is seeking injunctions preventing Pizza Hut representing to franchisees of Q Co that the master franchise agreements have been terminated or granting those agreements to any other person or company.
However, Pizza Hut, who deny any wrongdoing, claims Q Co has breached the agreement on grounds including it failed to make royalty payments to the parent company, failed to make payments due to Revenue and failed to ensure franchisees are complying strictly with the terms and conditions of their franchise agreements.
It is also claimed Q Co maintained false records and submitted false reports to the parent company.
Q Co denies the claims.
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