Bombay HC Temporarily Restrains Fashion TV Limited from Violating Franchise Agreements in Lucknow

Mumbai: The Bombay High Court has issued an ad-interim direction restraining the fashion media company Fashion TV Limited (FTV) from executing franchise agreements in Lucknow with third parties without first offering the franchise to their current franchisees.

Justice Manish Pitale observed that prima facie, despite a First Right of Refusal (FROR) clause in the franchise agreement, FTV executed another franchise agreement with third parties.

Commercial Arbitration Petition

The HC was hearing a Commercial Arbitration Petition filed by Manoj Agrawal and Vibhor Mishra, current franchisees of FTV in Lucknow, seeking interim relief based on an arbitration clause in the franchise agreement.

A franchise agreement titled “F-Spa Franchise Agreement” was executed on December 29, 2023, in their favor for the territory of Lucknow. One of its clauses granted the petitioners a “First Right of Refusal” (FROR) in the Lucknow territory if FTV intended to open another FSPA/F-Salon in the same area. According to this condition, FTV would necessarily have to offer such a franchise to the petitioners first.

The dispute arose when, during negotiations for a franchise agreement for another location in Lucknow, the petitioners learned that FTV might not have abided by the FROR clause. The petitioners produced an email dated August 21, 2023, wherein FTV suggested that they had already executed a franchise agreement.

The petitioners submitted that unless urgent interim reliefs are granted, FTV may execute such franchise agreements despite the FROR clause, which, in a way, gives exclusive rights to the petitioners.

Despite serving FTV through courier and email, no representation was made on its behalf during the court proceedings.

The court observed that prima facie, the recitals and clauses of the agreement granted the petitioners a specific FROR for the Lucknow territory for the agreement's duration and opined that the concerned email gave the impression that FTV executed a franchise agreement without offering it to the petitioners first.