Irish franchise holders win injunction against Pizza Hut
The holders of the master franchise for Pizza Hut's delivery services through Ireland have secured a High Court injunction at preventing Pizza Hut's US-based parent terminating that agreement.
Today 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, with an address in Texas, not to terminate franchise agreements purportedly terminated earlier this month pending the full hearing of their dispute.
Q Co, which has more than 35 Pizza Hut delivery franchises north and south claims the parent company is not entitled to terminate the master agreement.
Pizza Hut International LLC has argued that Q Co owes them €1m had urged the court not to grant the injunctions.
In his ruling, Mr Justice Hanna said he was prepared to grant the injunction, pending the hearing of the dispute, 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 that Pizza Hut would not seek royalty payments from his clients for a period of 12 months from December 2010 and November of this year, and have waived the arrears that had accrued.
The parent company, he noted, had very much disputed this claim. From the correspondence and submissions in the case the Judge said this issue could only be resolved at a full hearing of the action.
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, with the loss of 11 jobs, the Judge noted.
Business, the Judge added, was not like a marriage, where the courts could not force a couple in dispute "to cohabit".
The courts he added could however coax business partners into some commercial arrangement until matters had been finally resolved.
The Judge also said any loss suffered claimed by the parent company as a result of the injunctions being granted could be remedied if the case obtained an early hearing date.
In its proceedings Q Co is 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 of company.
However Pizza Hut, who have denied any wrong doing claims Q Co has breached the agreement on grounds including it has 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.
