At a hearing in the High Court of Justice yesterday (31 March), the Honourable Mr Justice Penry-Davey ruled in favour of the claimant, MGB Printing and Design.
MGB Printing and Design is a limited company that acquired the Kall Kwik franchise based at 19b St Petersgate, Stockport, Cheshire, in October 2007 and whose sole shareholder is Michael Bibby.
The judge ruled that the defendant (Kall Kwik UK) had given negligent advice to the claimant when the claimant was considering buying an existing franchise business from one of the defendant's franchisees and that it was in breach of contract with regards to both the franchise agreement and a marketing agreement that was entered into shortly after the claimant purchased the franchise.
The negligent advice claim was based on advice given by the defendant relating to the cost of refitting the Kall Kwik centre to the defendant's own minimum standards, which was advised to be no more than £15,000 by Kall Kwik UK's head of franchise sales John Anderson. An estimate carried out after the sale revealed that the cost would be at least £30,000.
The breach of contract claim, relating to both the franchise agreement and marketing agreement, was based on the level and competence of marketing support provided either by the defendant or by a third party engaged by the defendant.
According to the judgement, "issues of causation and quantum of damage are to be tried separately", however, it is expected that Kall Kwik UK will appeal the judgement of its liability. A spokesperson for Kall Kwik UK's parent company, ODC, said: "We are disappointed with the judgement in this case and will be seeking to appeal the decision."
