Facts: Carewatch sought to enforce various provisions in franchise agreements that it had entered into with Focus, its franchisee. Focus had purported to terminate its franchise agreements with Carewatch, on the basis that Carewatch had been in breach an implied duty of good faith, by setting up its own branches in competition with franchisees and ceasing to support or develop the franchise network. On Focus starting to trade outside the franchise agreement, Carewatch brought proceedings to enforce restrictive covenants against trading, that applied for 12 months following termination of the franchise agreements.

Judgment: Henderson J held that there was no implied term of ‘good faith’ and the restrictive covenants were all valid and enforceable at common law. Further, whilst the restrictive covenants fell within the scope of section 2(1) of the Competition Act 1998, provisions that were necessary to protect the know-how and assistance of a franchisor were not to be regarded as interfering with competition for these purposes. Carewatch was entitled to injunctive relief and damages.