Member News

Vicki Mitman, a solicitor in the firm’s Franchising team, recently attended the bfa Affiliate and Midlands Regional Forums. The bfa works closely with its members and affiliate members to help advance knowledge and expertise within the franchise industry and acts as the voice of ethical franchising in the UK providing information and advice to businesses looking to expand their current operations through franchising and to people considering joining a franchise. At forums, bfa members and professional advisors share information and ideas along with discussing current market trends and debating certain “hot” topics.

At the forums last week the following issues were discussed:

– How to grow franchising

– What franchisors do to launch a new franchise

– How to motivate franchisees in a mature network

– How franchisors use their networks to help them recruit new franchisees

– Review of the bfa Annual Conference (21/22 June 2012) – including ideas and discussion topics for the next annual conference.

– Update on the bfa/NatWest survey – the survey monitors the performance, attitude and opinions within the franchise industry. The survey revealed that the annual contribution to UK turnover within the franchising industry is now £13.4bn and that there are 929 active franchises. Both the annual turnover and the number of active franchises have increased quite considerably from 2011.

– bfa News and Update – including the launch of franchisee membership and the upcoming roundtable discussions and social evening on 19 July 2012

Leathes Prior is an affiliate member of the bfa and has specialised in franchising for over 30 years.

Steeles Law Head of Real Estate Michael Fahy and Trainee Solicitor Laura Tanguay consider the Court of Appeal decision of Helena Partnerships Ltd v HMRC [2012] EWCA Civ 569 regarding the charitable status of housing associations.

Last month, the Court of Appeal unanimously dismissed an appeal by housing association, Helena Partnerships Ltd (“HPL”), against a decision that it was not established for charitable purposes only; the upshot of which being that it did not qualify for a £6 million refund of corporation tax paid on rents received pursuant to the charitable exemption.

In 2001, HPL changed its memorandum and articles so that its objects included activity carried out by a social landlord “for the benefit of the community”. Later, in 2004, HPL became a registered charity. The issue on the appeal was whether HPL had been established for charitable purposes only in the period of 2001 to 2004; if held to be a charity, it could claim back a substantial amount of corporation tax paid during this time.

Held

The Court held that HPL’s objects were not exclusively charitable. Providing social housing was not, in itself, enough to establish HPL as a ‘charity’. Although it’s activities were said to be carried out ‘for the benefit of the community’, they were not limited to this as some of the housing stock was rented to private individuals who were not considered to be ‘in need’.

Lloyd LJ went on to say that the provision of housing accommodation, “otherwise than for those in some relevant charitable need”, was not a purpose “within the spirit and intendment” of the preamble to the Statute of Charitable Uses 1601. In order for a housing association to come within the scope of the preamble it was considered that the provision of housing would need to be restricted to the relief of need.

Comment

It is not sufficient for an organisation to assert, or for its governing document to state, that its activities or operations are to be undertaken for the benefit of the community. More is required and its purposes must fall within the scope of the preamble to the Statute of Charitable Uses.

If you require advice on any issues raised in this article please contact Michael Fahy on 020 7421 1720 or [email protected]

Norwich and Diss based law firm Steeles Law has recently recruited a new Marketing Manager and Business Development Executive, signalling a major investment in these areas for the future growth of the Whiting Road based business (which also has established offices in Diss and a city based team in Central London).

Matt Reed joins the team as Business Development Executive, a new position at Steeles Law, bringing with him with 12 years’ direct sales experience in a variety of industries, including IT/software sales, education, advertising and financial services.

Gemma Pendleton is the new Marketing Manager, having previously worked for another Norwich based law firm in a similar role and with extensive prior experience in the voluntary, e-commerce and professional services sectors.

Commenting on the new appointments, Stephen Drake, Managing Principal, said: “Steeles Law has always considered itself as a modern, forward thinking firm. Over 20 years ago, we were the first local law firm to take a place on one of the modern business parks on the outskirts of the city – a move which is now being echoed by many other firms wishing to become more accessible to the modern client. With the appointment of Matt and Gemma, we are again adapting to the changing landscape of the legal profession, following the advent of the Legal Services Act last year, to future proof our business and ensure that we continue to provide the personal, high quality service that our clients have come to expect.”

Steeles Law’s Head of Employment, Oliver Brabbins, considers the implications of a recent Court of Appeal decision in which an employee who set up a business competing with his employer was held not to be in breach of his contract of employment.

In this case, the employee (R) had been recruited straight from university as an applications consultant by a specialist IT consultancy firm, Customer Systems plc (CS). During the period of his employment, from 2001 to 2009, R was promoted a number of times and in his final year of employment he was responsible directly or indirectly for 59 per cent of the group’s total revenue. Crucially to the case, however, R’s contract of employment remained unchanged during the period of his employment. The original contract he entered into in 2001 contained a confidentiality provision, but no post-termination covenants to restrict his activities after his employment ended.

R resigned and left CS in February 2009. Both before and during his notice period, he had made preparations to establish a competing business, including discussing potential work with existing clients of CS.

CS brought a claim against R for breach of his contractual obligations, and breach of his fiduciary duty to the company by failing to report his contact with the clients to CS. A ‘fiduciary duty’ is essentially a duty to act in the company’s best interests and is a duty owed by all directors, but not necessarily employees, of a company. The company’s claim was upheld by the High Court.

R’s appeal to the Court of Appeal has since been successful. The Court did not agree with the judge’s conclusion that there was no material difference between R’s situation and that of a director. The judge had failed to take into account the express terms of R’s contract and had failed to properly consider whether, as an employee of the company, R had any fiduciary duties at all. In the Court’s view, there was nothing to suggest a fiduciary duty applied to R, and there was no express contractual term prohibiting him from contacting clients or setting up in competition.

Comment

This case illustrates very well the danger of failing to ensure that contractual documentation is regularly reviewed and updated to ensure that it accurately reflects the relationship between the parties and provides adequate protection for the employer. A contract of employment for a junior employee will rarely be suitable for an employee who has been promoted to a more senior position and who is likely to pose a much greater risk to the employer’s business when he or she departs.

Confidentiality provisions and post-termination restrictions (“restrictive covenants”) should always be carefully tailored, depending on the nature of the business and the position of the individual employee within that business. When an employee is promoted, proper consideration should be given to the question of whether a new contract of employment is appropriate to reflect the employee’s seniority.

A copy of the Court of Appeal’s judgment is available at: https://www.bailii.org/ew/cases/EWCA/Civ/2012/841.html

A Great Yarmouth businessman has successfully completed one of the toughest and most notorious triathlon events in the world, the annual Escape from Alcatraz.

Pasta Foods managing director Karl Jermyn had to swim a mile and a half across San Francisco Bay from the legendary island prison and then cycle 18 miles and run another eight.

Even though his sponsored effort will raise hundreds of pounds for Great Yarmouth charity Centre 81, 40-year-old Karl admitted that he would have taken up the challenge for nothing.

“I’ve been in triathlons before. I like setting a goal, pushing the boundaries and seeing what you can achieve,” he said.

That attitude is also important to members of Centre, 81 – where he is a trustee – which supports people with physical and other disabilities and helps focus on their abilities rather than disabilities. He was delighted that his achievement helped their 30th anniversary appeal.

The swim from Alcatraz to the shore, something never successfully achieved by a prison inmate in its 29-year history, was the toughest obstacle.

“Once, it was thought to be impossible and the adrenaline kicks in when you plunge into icy waters with strong swirling currents and the potential for sharks,” said Karl. “Not everyone makes it. There are about 100 small craft standing by to help in an emergency.

“At first, it is silent. Then you hear the announcer on the far side encouraging swimmers ashore. Then you hear the cheers of the crowd and see the shore and that spurred me on.

“I had trained hard and always thought I would make it but it was a mixture of relief and joy to get there.”

There was no time to rest; he then had the gruelling cycling stage around the steep, undulating streets of San Francisco, followed by the demanding run, a mile of it on sand.

“Having completed the swim, nothing was going to stop me. Most of the 2,000 competitors are American and as I approached the finishing line it was brilliant to hear the announcer calling my name from Norwich, England.”

Karl clocked 3hr 53m 25s for the event, just under an hour of it on the swim. Afterwards, he received a medal, a recovery drink and, appropriate to his day job, a pasta meal.

The Library Restaurant Bar and Grill Fashion Gala Dinner for Charity

Local Charity Leeway Domestic Violence and Abuse services Wednesday 25th July from 6.30pm and will involve presentations from Rachel Glick of Lingerie Indiscrete and Claire Bunton of Claire Bunton Image Consultancy, followed by a beautiful two course meal and a fashion show from Style Quarter, a new, independent fashion company.

This event is aimed at all women with an interest in fashion and will provide them with an ideal opportunity to learn more about the importance of wearing correctly fitted lingerie and also how they can make the most of their image with colours, shapes and textures.

Tickets available from www.leewaysupport.org.uk or calling 0845 241 2171 (extension 4). Ticket 20.00pp with a two course supper and welcome drink

Gordon Secker is taking a fortnight off work as auditor with PKF Accountants and business advisers for a once-in-a-lifetime chance to get involved in the Olympic games.

The Lowestoft man has been selected for the team of Olympic volunteers and will help organise travel for more than 25,000 journalists – even though it has meant giving up tickets to see a couple of the actual events.

“It wasn’t an easy decision but it’s something different; something I have never done before and will never do again and rather than watching I will be playing an active part and savouring the atmosphere across the Olympic Park,” he said.

It means a significant few weeks for the 38-year-old senior business adviser who has also just completed 10 years service with PKF in Great Yarmouth.

More than 12 hours training has prepared him for the Olympic role where he will join a team ensuring smooth passage for broadcasters and writers using a shuttle bus system to various Olympic events. He’ll work 13 eight-hour shifts and get to keep his official uniform as a souvenir.

PHOTO: Bubbly moment for Gordon Secker (left) as he marks 10 years at PKF and prepares for his Olympic role. Bob Hawkins, PKF partner, hands over the Champagne.

Child Contact – proposed amendments

The Government recently announced its intention to amend legislation regarding parental contact with children, following the Family Justice Review published in November 2011.

Many have raised concerns over the plans to amend the current legislation which aim to make it clearer to those going through separation/divorce that children must have an ongoing relationship with both parents following their separation; unless contact with either parent causes concerns over the safety and welfare of the child.

The current legislation in this area is covered by the Children Act 1989. Section 1 makes it particularly clear that “the child’s welfare shall be the court’s paramount consideration”.

In practice, some couples going through separation/divorce will find that they are able to finalise contact arrangements between themselves without the need to involve Solicitors or the Courts. Many will find they require a little assistance from Solicitors and others will need more help from Solicitors and will also need the involvement of the Court system to reach a suitable contact agreement.

Whichever route is taken, whether it includes the Courts or not, the child’s best interests will always be the overriding factor.

The Government propose to amend section 1 of the Children Act 1989 to require the Court to ‘work on the presumption that a child’s welfare is likely to be furthered through safe involvement with both parents – unless the evidence shows this is not to be safe or in the child’s best interests’.

Practically the amendments appear to make little difference to what happens within the Courts now. The current position adopted by the Courts is that ideally both parents should be involved in the child’s upbringing with contact being the most important way of achieving this.

The proposals clarify the need to be fair and reasonable when finalising contact arrangements with both parents. The proposals do not attempt to verify the minimum amount of time each parent is to spend with their child, nor will they be suggesting an equal division of the child’s time between each parent. Realistically these suggestions would be impractical and are matters to be decided on a case by case basis.

It seems the proposals are to make it clear to parents who are or have separated that, in cases where there are no concerns for the child’s safety, consideration must be given to the importance of the child seeing both parents regularly in order to maintain a meaningful relationship with each of them.

The amendments will mean it is no longer acceptable for a parent to deny the other parent contact with their child where there are no concerns for safety or welfare because of the legal presumption of shared parenting.

The consultation on the above proposals closes on 5 September 2012.

We’re delighted to announce the launch of the new Britannia Training website which will allow you to search for and book the courses you need online.

Because customer service is important to us, we will be following up each booking in exactly the same way as before – making sure that you have found the perfect course to suit your needs, and ensuring that you know what to expect on the day. We hope you will have a browse of our new website and let us know what you think! We would appreciate your feedback!

Britannia Safety & Training has a Twitter page, you can find us at Britannia_train, just type this is the search engine and tweet us! Keep updated with the latest news, legislation and updates on Health & Safety.

Britannia also has a page on IPatter, you can find us at Britannia Safety & Training, Wymondham.

COMING SOON! WATCH THIS SPACE! Britannia will have a Facebook page “Britannia Bad Boys”, you can read the lastest health & safety information and play videos!

We have just launched our new ecommerce website design and build service to help companies take advantage of the massive growth in online shopping. The new platform allows bespoke design and has a very long shopping list of ecommerce features to allow our clients to have highly effective and usable shopping sites.

Bigfork can also provide digital marketing services to help increase profitable traffic to your online shop through SEO, email marketing, social media and PPC campaigns.

To see the new platform in action take a look round at our snappy demo site at www.krocodile-photo.co.uk

You can also download our ecommerce pack below which has full details. To see more examples check out our ecommerce portfolio.

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t:01603 513080

The May 2012 survey was emailed to the over 500 contacts. The response rate for the survey was five percent.

Summary of results There was a broad cross-section of industry sectors who responded to the survey including engineering, retail and marine services.

In the past six months, half of the respondents have experienced an increase in orders, compared to 23 percent that had seen a reduction in the number of orders received. Forty-six percent of respondents saw an increase in their costs, compared to nine percent who saw a reduction. Nine percent of respondents experienced an increase in that staff numbers compared to 18 percent who saw a reduction in staff levels.

Over the next year, 43 percent of respondents are planning investments with just under a thirty percent are expecting to increase staff levels. However, 43 percent are delaying their investment plans, which is due to insufficient demand (63 percent) and a lack of available finance (31 percent).

Forty seven percent of respondents would like general business advice events, whilst 21 percent of respondents said that they would like general business training, skills development and customer retention advice.

Attached is a full graphical summary of responses

Three members of the firm’s Franchising Team (Jonathan Chadd, Ed Savory and Vicki Mitman) recently attended the British Franchise Association’s (BFA) Annual Conference in Telford.

The Conference comprised as follows:

•keynote speech from the UK Trade & Industry on the services which are available to UK businesses looking to expand into foreign jurisdictions

•update from the BFA on it’s the progress of “One Vision” with the introduction of franchisee membership so that the BFA will become truly representative of the entire franchising industry in the UK

•retirement of Sir Bernard Ingham as President of the BFA

•keynote speech from Sarah Walker (freelance writer journalist) on engaging with the media

There were also three sets of concurrent seminars lead by BFA franchisors and professional adviser members (known as Affiliates) on the following topics:

•Session 1: Advanced Franchising – Exit planning for franchisors; Franchising Essentials – Building the right support structure; Legal & Ethics – Making sure your agreements are up to date; and Sales & Marketing – The dangers & pitfalls of social media

•Session 2: Advanced Franchising – How to use successful profiling in franchise recruitment; Franchising Essentials – Avoiding franchisee first year failures; Legal & Ethics – Managing franchisee disputes; and Sales & Marketing – Local franchisee marketing

•Session 3: Advanced Franchising – Managing franchisees out of the comfort zone; Franchising Essentials – Ongoing training and levels of support; Legal & Ethics – Advising on the Ethics of Franchising; and Sales & Marketing – Online marketing

The highlight was undoubtedly on the evening of Thursday 21 June which saw a glittering awards ceremony for the 2012 bfa HSBC Franchisor of the Year Awards, supported by Express Newspapers. The winners were as follows:

bfa HSBC Franchisor of the Year Award

•Gold – Autosmart

•Silver – Home Instead Senior Care

•Bronze – Driver Hire

•Other finalists – McDonalds and Tax Assist Accountants

HSBC Franchisee Support Award

•Winner – Auditel

•Other finalists – Countrywide Signs; Jaspers; Maid2Clean and O2

Express Newspapers Brand Builder Award

•Winner – Cafe2U •Other finalists – Mac Tools; Envirovent and Wiltshire Farm Foods

Leathes Prior was proud to support clients nominated for awards and sends its warmest congratulations to all of this year’s finalists. To find out more about the 2012 awards winners click on: www.thebfa.org/news/bfa-news/uks-top-franchisors-revealed