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Loss of profits in a Fast Food franchise

Appointment Type: Party appointed expert

Service Area: Loss of Profits

Industry: Hotels and hospitality sector

Sub-category: Takeaway food shopsmobile food stands

Litigation Type: Civil

Appointed as a party expert in a High Court case to assess the loss of profits concerning a fast food franchise. The franchisee made a significant claim from the franchisor of a large international fast food chain for losses incurred by operating the fast food business, including the lost opportunity of operating an alternative business.

The franchisee operated the fast food business for c. three years and during this time incurred trading losses. Financial accounts were available for the first two years, but not for the final period of the business prior to closure. It was necessary for the expert to reconstruct, to the extent possible, financial accounts for the final period by reference to the original accounting records. The expert commented upon the extent to which there was scope to mitigate the fast food franchise trading losses by comparison to the standard operating fast food franchise model.

The expert was also instructed to consider the lost opportunity of the party not being able to operate an alternative business opportunity, which had been considered as an alternative to the fast food chain franchise.

The case settled before it went to court.