MULTI-NATIONAL printing business "Snap" claims its top Irish franchisee in 2012 has set up a competing outlet.
KM Franchising Ltd, which runs the Irish Snap franchise on behalf of its Australian parent, says Tedco Ltd, of Grattan Business Park, Clonshaugh, Dublin,and its directors Noel Candon and Declan Halton, are in breach of their franchise agreement.
KM is seeking a High Court injunction preventing the defendants from competing with Snap pending a full hearing as well as orders preventing them from removing Snap signs from their Clonshaugh premises and from doing anything to terminate the franchise agreement.
They also want injunctions requiring them to continue paying eight per cent of gross sales in franchise royalties, two per cent of which goes on marketing and another one percent to the worldwide master franchise owners, Snap Australia.
The defendants deny the claims and are opposing the injunction application.
KM director David Moffitt said in an affidavit the defendants, who ran the franchise's top performing centre in 2012, had set up a rival outlet next door to the Clonshaugh premises and had taken down two Snap "bubble" signs on February 13 last.
The shareholders of the company behind this new outlet, Esmark Finch Ltd, are Declan Halton's wife Tracey Lindsay and the financial controller of Snap Clonshaugh, Rolando Cedeno, Mr Moffitt said.
KM has learned the rival outlet is operating with the same equipment as the Snap business, using the same or similar staff and is deliberately targetting customers and contracts of Snap, he said.
From a conversation with Mr Halton, Mr Moffitt said he (Halton) "frankly accepted" that the new venture intends to take contracts directly from Snap.
He denied claims by Tedco's other director, Noel Candon, that they
(Tedco) had made a sizeable overpayment of franchise fees over the last three years.
He said unless the injunction is granted, KM will suffer severe damage to its reputation and goodwill.
The hearing, before Mr Justice George Birmingham, resumes next week.