Hungry Jack’s resolves franchisee restraint clause case

Hungry Jack’s has resolved a case which sought for an injunction to block two new restaurants within 5km to an existing franchisee’s locations.

When Hungry Jack’s announced plans to open two new outlets in the Central Coast of New South Wales, the franchisee, Peregrine Pty Ltd, took the burger business to court, alleging the new stores would be a breach of the franchise agreement, the Franchising Code of Conduct, and the Australian Consumer Law.

Peregrine operates two Hungry Jacks restaurants at Dora Creek and Cooranbong on the Central Coast. It claimed the plans for Hungry Jack’s to convert existing McDonald’s sites on either side of the M1 at Wyong would have an impact on Peregrine’s income, and breach restraint and good faith clauses.

Peregrine’s statement of claim pointed to Hungry Jack’s agreement not to open a store within 5km of Peregrine’s two outlets, or within 200m either side of the section of
the M1/Pacific Highway, reports Lawyerly.

On 28 March, Justice Goodman dismissed the case by consent. There is no information on the settlement between the two parties but each side will pay for its own legal costs.

This story was originally published on Franchise Executives.

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