The Bombay High Court recently restrained FTV India from opening spa/salon franchises in violation of agreements entered with Lucknow-based businessmen last week.
Last Thursday, Lucknow-based businessmen approached the Bombay High Court seeking an injunction against FTV on account of a franchise agreement between them, which contained a ROFR clause. ROFR, or Right of First Refusal, is a right in commercial contracts by which one party must give the other party the option to start additional business or match an offer made by a third party before it can enter into an agreement with the third party.
FTV is a global brand that, for the longest time, was known as an eponymous television channel. Off late, it has, through its Indian subsidiary, started operating units like spas, salons, cafés, and even real estate on co- branding, licencing, and franchise models. In fact, FTV had entered into an agreement with one of the businessmen, giving them the right to open a spa in Lucknow and furthering an ROFR in respect of any additional unit for the territory of Lucknow. However, even after taking the franchise fee, FTV went ahead and informed them that they are opening the franchise with some other party, prompting the businessmen/ franchisees to approach the court.
The matter came up for hearing before Justice Manish Pitale, J, who passed an ad interim injunction against FTV restraining them to act in violation of the agreement. FTV did not appear on the day of the hearing, nor has FTV issued any release or statement post the order. The Petitioners were represented by Senior Counsel Zal Andhyarujina, Rishi Murarka, and A and A Partners, a Lucknow-based firm.
Their lawyers refused to comment, stating that the matter is before the court. As per the order of the High Court, FTV cannot grant franchises in Lucknow in violation of the ROFR in the agreement between them till 16th October. The Sprouts team sent mail for comment on the story to Kashiff Khan, MD, fashion TV, but he has not replied.