Franchising’s whole agreement clause

0C3529BD-9B79-41B2-97C6-AD02501CC312-300x169 Franchising's whole agreement clause


Franchising and the “whole agreement”

What Harry Kane’s gentleman’s agreement has to do with franchising.

Franchise agreements and most contracts have a term. That is a period of time that they are in force and then they expire. There’s a thing in franchise agreements called a whole agreement clause. Don’t underestimate the power of that paragraph in your franchise agreement.

When England’s best player, after signing a six year agreement, apparently said he also had a gentlemen’s agreement that he could leave if things didn’t go well I assume everybody who knows anything about contracts knowingly smiled and thought “Awww bless him”.  

That’s not how it goes.

The whole agreement is the only agreement.

A hand shake or verbal commitment is not worth the paper it’s written on. That’s the whole point – there is no paper, and therefore no contract, it’s not in the whole agreement. So do remember that if you’re buying a franchise won’t you? The whole agreement is the one contract you’re signing and if it’s not in the agreement it doesn’t count.

Down the line your lawyer could have a go for you if you wanted them to get you out. They’ll say there’s a chink of light, maybe some representations you can lean back on or other breaches etc etc. But franchise agreements are pretty robust things. Contract law being what it is.

I expect that dawned on Harry Kane over time. Or his brother, who set up his own football agency after sitting in with a previous negotiation or two and thinking he could do it too. So Harry hired his brother to represent him. Which is a bit like me watching Harry Kane and thinking “I could do that”.

In the end his whole agreement is all that mattered.  And his boss and all his legal team knew that all along. Harry and his agent brother are wiser for the experience. If you want to end any contract early then you’ll likely have to buy yourself out of it. But only if your franchisor is happy with the exit conditions. Or in Harry’s case if another football club bought him out of it and at a price Tottenham were happy with. Neither of which happened.

Comply with the whole agreement.

Signing a franchise agreement is both an obligation and a right. Every franchisee immediately understands the rights they’ve bought. Many don’t appreciate the obligations they’ve signed up to. Those obligations are often overlooked. You need to stay compliant and understand what you’ve signed. You will likely be held to the terms even if you don’t want to some way down the line. Some terms also stretch beyond the agreements end point but if you want what the franchisor has then sign up for it. Or don’t. It’s a free choice. But do be sure to honour the terms of what you’ve signed. 

So my advice to you is that if you’re about to buy a franchise remember that the only contract in town is the one you’re signing. Further to that, you’re also signing to acknowledge that everything that was said or emailed beforehand is superseded by what you’re signing. You’re also signing to say that you’ve taken professional advice. You’re also signing to say that you understand the risks. You’re also signing to say that anything you want in the agreement is appended to the agreement. I could go on but you’ve got the point now haven’t you. Haven’t you?

I should be a football agent.


IMG_0196-150x150 Franchising's whole agreement clauseA expert lawyers viewpoint.

Sharon Needle, Managing Partner, Needle Partners.

“Whole Agreement” clauses (sometimes  called “Entire Agreement” clauses”) seek to ensure each of the parties to an agreement know exactly what they are committing themselves to and to avoid one party arguing that they had agreed something else prior to signing the agreement. There are a few exceptions to this principle but clearly Harry Kane’s football contract does not fall into that category. He will have signed for a fixed term and any earlier termination provisions would likely be at the behest of Tottenham. While we do not know all the details of the so-called “gentlemen’s agreement”, it should have been put in writing as a formal variation to the actual contract. So yes if you are signing up for a franchise and it says your term is a fixed five years and the franchisor say something like “don’t worry, we can agree to let you go earlier if it doesn’t work out for you” or “yes it says you pay is 10% of your turnover to us but we can look at this and reduce it next year if you want ” get this in writing !

Unfortunately a hand shake just will not do. If in any doubt ask your solicitor to ensure any “side arrangements” are referred to in the actual contract and this is important even if they are in writing and signed if the while agreement clause does not refer to them.”


 

See also the top legal priorities in franchising written by Darwin Gray Solicitors.

 

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