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Dublin: 17 °C Monday 25 May, 2020

Supermac's loses High Court bid to stop franchisee doing up 'dated' Limerick restaurant

John and Mary Lyons operate the Supermac’s outlet at Ennis Road, Limerick.

Image: Laura Hutton/

THE HIGH COURT has dismissed Supermac’s application for an injunction preventing one of its franchise holders from carrying out refurbishment works on the premises.

The injunction, which if granted would have been put in place pending the full hearing of the dispute, was sought against John and Mary Lyons who operate a Supermac’s outlet at the Ennis Road, Limerick.

Supermac’s, who accept that refurbishment works need to be carried out, claimed the couple were in breach of a franchise agreement which stipulates that it carries out refurbishment and repair works on its fast food restaurant’s outlets.

Supermac’s claim is that it carries out such works to ensure high standards at all its outlets are maintained.

Counsel for Supermac’s told the court yesterday that the cost of the restoration is then charged back through an increased franchise fee.

Barrister Rossa Fanning SC said that the usual franchise fee amounted to a royalty of 7% of net sales, increasing to 10% to cover the cost of the restoration works.

The couple denied the claims, rejected the contention they were in breach of contract and had opposed the application.

They argued that the company had known but had failed to carry out necessary refurbishments works for several years, and said the injunction application was linked to other legal proceedings involving the parties.

In his ruling today Justice Senan Allen said he was satisfied to dismiss the injunction application.

In his decision, he noted that Supermac’s and its owner Pat McDonagh had worked successfully with John Lyons, who has operated several Supermac’s franchises, for many years.

That relationship had “rapidly deteriorated” in the last five years, the judge said, adding that McDonagh and the couple had been involved in a Circuit Court dispute over the lease of the premises at Ennis Road.

Last year the Circuit Court had ruled in the Lyons’ favour, but the lower court’s decision was the subject of an appeal due to be heard before the High Court next month the Judge said.

Turning to the proceedings before the court the judge said that as this was an injunction application the court could not make any findings of fact.

The judge said he was satisfied from the evidence put before the court that Supermac’s, which claimed the Lyons were in breach of a March 2000 franchise agreement, had not made out an arguable case likely to succeed at a full trial.

Supermac’s arguments in regards to the 2000 franchise agreement “did not get out of the blocks” the judge said.

It appeared from the evidence put before the court during the hearing that the 2000 franchise agreement had, in fact, originated in 1992, the court noted.

The judge said he accepted the argument advanced by the defendant’s lawyer’s that in this case, damages would be an adequate remedy if Supermac’s were successful in its action.

The judge added that it is not likely that a businessman of John Lyons’s experience would carry out refurbishments that would have to be undone in a year or so.

The balance of convenience also favoured the dismissal of the injunction application, the Judge added.

The judge also made the costs of the injunction proceedings against Supermac’s but placed a stay on that order pending the outcome of the full hearing of the action.

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Aodhan O Faolain

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