Business Questions

January 31, 2014 6:59 pm

Can I stop rival leafleting my street?

Roger Beale cartoon©Roger Beale

I have recently set up a retail business. Everything was going well but then a competitor sent an employee to my street to hand out leaflets offering discounts. This person is not standing right outside the shop, but a couple of doors down. I’ve tried telling him to move on but he says I’ve got no right to do so, which I fear may be the case. Is there anything I can do to stop him trying to steal my business in this way?

First, contact your local council to establish whether the leaflets are being distributed in a controlled area. Under the Clean Neighbourhoods and Environment Act 2005, councils enjoy powers to adopt anti-littering policies.

Many councils have therefore created designated areas within town centres in which anyone wishing to distribute leaflets must first apply to the council for a licence. Some councils have even imposed an outright ban in some areas. People caught by a council official distributing leaflets without a licence will be stopped and very likely incur a fine, often about £80.

In some cases, a person can be prosecuted. Your local town hall will confirm if your shop is in a designated area and there are likely to be notices posted in the area. If this is the case you can report the leafleting taking place with a view to getting it stopped.

Other potential courses of action, such as claiming a nuisance or obstruction of the highway, are likely to prove more difficult to establish and could be costly to pursue, although the police might be able to assist with the latter. Finally, if you have your own plans to embark on an advertising campaign, be it a leaflet campaign or otherwise, you should bear in mind the relevant bylaws your local council may have in force. I would also suggest that you consult your legal advisers to establish what other laws and regulations (if any) may apply to your chosen form of advertising.

Andrew Bailey is a solicitor in the company and commercial department at Payne Hicks Beach, a law firm


Cutting the line

I sell luxury mobile phone accessories with a franchise store in a local shopping centre. I am now moving more operations online, so need to end the franchise relationship. I have not been able to find any written agreement of a notice period. The franchisee was performing well. What steps do I need to take to end the relationship?

Terminating a franchise agreement can be risky, with franchisors having to pay substantial damages where agreements are not terminated correctly. Your franchise agreement will usually provide the mechanism and circumstances allowing you to terminate the agreement, including the formalities for the notice that will need to be served on the franchisee, which may vary depending upon your reasons for terminating.

This should therefore be reviewed in detail before taking any further action. It would be unusual for a franchise agreement to include an ability to terminate arrangements at any time on notice given the expense that the franchisee has incurred in setting up the franchise.

As such, you may not necessarily be able to terminate for convenience in the way you have suggested. As the franchisee is performing well, if the franchise agreement doesn’t allow you to terminate for convenience, you should review the exclusivity arrangements within your agreement.

It may be that you have granted the franchisee the sole right to sell products in a particular territory rather than an exclusive licence in which case you may be able to sell your products online while allowing the franchise arrangements to continue. I would strongly suggest that legal advice is taken before taking any further action.

Lisa Bridgwood is a senior associate at Knights Solicitors, a law firm


Customer took offence

I own a London-based retail business with three shops and 20 employees dotted around the capital. A customer recently complained to me that one of my retail assistants had made a comment regarding sexual orientation when he was last in the shop. The customer said that he had felt thoroughly discriminated against as a member of the lesbian, gay, bisexual and transgender community and that while he would not on this occasion be suing, he had no desire to return to the shop. How can I make sure that this doesn’t happen again - and could I be sued for potentially offensive comments made by my staff?

The Equality Act 2010 provides your customer with protection from being discriminated against because of his sexual orientation. The alleged discriminatory comment made by your retail assistant could result in a claim against your business for compensation for “injury to feelings” of between £750 and £6,000. The customer has six months from the date the comment was made to bring a claim.

I recommend that you appoint a manager to investigate the employee’s conduct. If the allegation turns out to be true, follow your disciplinary procedure (at least to the standard of the Acas code of practice). If the evidence demonstrates that a discriminatory comment was made, then dismissal or a written warning may be an appropriate sanction. If you consider dismissal, I suggest you take further legal advice.

A firm, but fair, response will set an important precedent and should ensure that employees refrain from this sort of misconduct. The best way to stop this type of conduct happening is to provide your staff with equal opportunities or diversity training. Many employees fail to appreciate that offensive comments, banter and even unconscious bias can lead to unlawful discrimination against colleagues and customers. The training is essential to develop their understanding of legal issues. Equally, most employees are unaware that they can be personally sued for their acts of discrimination. Your business will have a much stronger defence to a claim if you can show that you took all reasonable steps to prevent discrimination.

Peter Jones is a senior associate in the employment team at Thomson Snell and Passmore, a law firm

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