Legal
Food for thought after chicken supply chain saga
A leading franchise expert is calling on franchisors to take safeguards against supply chain failure in the wake of ongoing delivery problems at fast food firm KFC. Gurmeet Jakhu, director at Birmingham-based law firm Emms Gilmore Liberson, has advised franchisors to ensure that suppliers can meet the commitments made in their franchise agreements and, where appropriate, take steps to obtain compensation for any losses sustained. KFC was forced to close
hundreds of restaurants last month, having run out of supplies of chicken. More than 200 of the
chain's nearly 900 stores were forced to close, while many of those that did open cut their hours or had to offer limited menus.
The nationwide chicken shortage
was caused by teething problems with a new delivery contract with DHL. Mr Jakhu, who has more than 17
years’ experience in franchising and commercial litigation, insists that the difficulties experienced by KFC need not apply to other franchises. He said: “A common feature in
fast food retail franchising is that the franchisor will, either directly or indirectly, control the supply of food products and ingredients to be used by the franchisee. “Recent events have shown how this can lead to serious business disruption when a franchisor is unable, whether through supplier or logistics
Gurmeet Jakhu
issues, to provide a key component. “Where franchisors do have exposure to supply commitments in their franchise agreements, they
KFC refuses to get in a flap over things with its online response
should make sure that the suppliers are in a position to provide the service and this can be achieved by undertaking pre contractual due diligence and audits. “Franchisors should also ensure
that adequate safeguards are in place to obtain compensation from the supplier for any losses sustained by it.” Despite recent issues at KFC,
franchising is in good health, weathering the financial storm of the global economic downturn. Figures from a 2015 British
Franchise Association/Natwest survey reveal that franchising contributed £15.1bn to the UK economy, an increase of 46 per cent over the past decade.
Sector Focus
Court case is no moot point
Law students at The Sixth Form College, Solihull, found themselves in court recently, arguing the case for the defence. Georgia Coleing and
Jawaher Omer represented the college in the Mooting Competition at the University of Wolverhampton, and won. A moot court competition is basically a mock hearing, and is usually an appeal against a final decision. The pupils took on students
from Oldbury Academy and played the role of the defence. The case concerned an appeal with the legal point on gross negligence manslaughter being mooted – a topic that is a key part of A-level law examinations. A panel of three judges and
the dean of the law school provided feedback on the students’ efforts – after winning the competition, they were due to go forward to take on Windsor Academy in the final.
April 2018 CHAMBERLINK 61
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