A New Zealand multi-site franchisee recently caused an uproar by rebranding 3 Club Physical gyms overnight to "Jolt Fitness", an independent brand, arguing that it was concerned about marketing conducted by the franchisor.
The franchisor of the New Zealand franchise, Club Physical, acted swiftly to successfully obtain an injunction from the New Zealand High Court requiring that the "Jolt Fitness" gyms be closed and the gyms be rebranded back to the Club Physical brand and operated by the franchisor as company-owned gyms.
The parties then negotiated a transfer of the leases and acquisition of the equipment to the franchisor to finalise the change.
This illustrates that breaches of franchise agreements will not be tolerated and can be enforced by swift and decisive legal action.
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