Franchise agreements often contain restraints of trade. The restraints typically apply for a period of time after the franchise ends, and may restrict franchisees from competing with the network or conducting a similar business within a particular geographical area.

Whilst these restraints can be legitimate and important protections for the franchise network, they can also be a major hinderance for franchisees looking to move onto their next venture.

Clause 23 of the Franchising Code of Conduct can be a way for franchisees to avoid the operation of these restraint clauses. However, it has quite a narrow application - and there numerous proactive steps that franchisees must take to obtain the benefit of the exception.

The Full Court of the Federal Court recently handed down its decision in Garner v Central Innovation Pty Limited [2022] FCAFC 64, a case about misuse of confidential information.  In its decision, the Court made numerous important observations concerning how claims should be advanced, and how litigation should be pursued.

This article will focus on what the Court stated in respect of:

• Whether a Plaintiff ought to be confined expressly to the matters it has pleaded, or whether it can advance claims outside of the pleadings where notice is provided to the Defendant; and
• The circumstances under which a claim for loss can be brought by shareholders of a company, and/or whether the company should bring it.