Does local law allow class actions by multiple franchisees?

Franchise & Licensing

Angola Small Flag Angola

Although class actions are not specifically foreseen in the Angolan legal system, we note that the Civil Procedure Code provides in article 30, that plaintiffs with similar claims or similar interests, might colligate themselves into one single action.

Chile Small Flag Chile

No.

Denmark Small Flag Denmark

Yes, the Administration of Justice Act allows class action and there are no statutory rules under Danish law preventing a group of franchisees from filing a case against the franchisor.

Azerbaijan Small Flag Azerbaijan

In this regard, legislation of the Republic of Azerbaijan does not contain any restrictions.

Egypt Small Flag Egypt

The Egyptian Procedural Law in Article (3) thereof states that “Any lawsuit, plea or claim based upon the provisions of this Law or any other law, shall not be accepted, if the party concerned does not have a personal, direct or existing interest approved by the law…etc.” based on this article, in order to file a lawsuit, each party shall file by himself or by issuing a POA for another party to act on his behalf and also should have a personal, direct and existing interest. Therefore, multiple franchisees cannot bring legal proceedings by one franchisee who represents the remaining members unless such franchisee has a POA to represent them all. However, this obligation shall not be required if the franchisees have established a legal-regulated group for example: syndicates or private associations. In this event, incorporation law and its articles of association will decide on the party to act on behalf of the group.

France Small Flag France

No. Class action suits are limited to B to C relationships.

Greece Small Flag Greece

No. Class action law-suits are only provided under Consumer Protection laws and cannot be used in any other field.

Mexico Small Flag Mexico

No, class actions in Mexico are only applicable in certain specific cases, such as consumer protection procedures and amparo suits.

Lebanon Small Flag Lebanon

Lebanese law does not recognize class actions. However, if one or more named franchisees have filed a lawsuit against the franchisor which raises an issue common to all franchisees, the plaintiffs (i.e..the franchisees) have the right to request the intervention of those franchisees who have a common interests in the filed lawsuit, according to the Code of Civil Procedure.

China Small Flag China

There is no mandatory restriction upon class actions by multiple franchisees.

Peru Small Flag Peru

Considering that Peru is under the Civil Law System, class actions are not common in Peru. However, it is possible that multiple franchisees sue one franchisor. On the other hand, it must be noted that under the Peruvian Competition Law, INDECOPI has the possibility to sue on behalf of consumers for the reparation of damages caused by a cartel.

Philippines Small Flag Philippines

Three requisites must concur for a class action filed by franchisees to prosper. First, the subject matter of the controversy must be one of common or general interest to all franchisees. The rights asserted must be shared and not be distinct for each franchisee. Second, the franchisees must be so numerous that it is impracticable to join all as parties. Third, a number of them which the court finds to be sufficiently numerous and representative as to fully protect the interests of all concerned must sue for the benefit of all.

New Zealand Small Flag New Zealand

Yes.

Russia Small Flag Russia

Russian law permits class actions to be brought by a number of allegedly aggrieved claimants. Franchising is not an exception, however, there has to be several factors to be considered for a class action eligibility purpose:

  • the defendant under such action must be one and the same towards each member of the group (franchisee),
  • the subject matter of such action must concern common or similar rights and legitimate interests of group-member (franchisees),
  • the grounds for such action must relate to similar factual circumstances, and
  • franchisees must use one and the same remedy to protect their rights under such action.

Class action is possible if at least five (5) group-members have joined the class action.

Norway Small Flag Norway

On certain conditions, franchisees (or other groups such as a group of customers) could file for a class action lawsuit. A class action lawsuit is conditional upon the following: (i) the claims are based on substantially the same factual and legal basis; (ii) the claims can be tried by the court based on the same procedural rules and before the same panel of judges; (iii) a class action lawsuit is considered the best procedure; and (iv) it is possible to appoint a group representative.

United States Small Flag United States

Yes. Class actions by multiple franchisees are permitted so long as the “class” of franchisees satisfy the federal and state requirements for certification (i.e., (i) the class must be so numerous that joinder of all members is impracticable, (ii) there must be questions of law or fact common to the class, (iii) the claims of the representative parties must be typical to the class, and (iv) the representative parties will fairly and adequately protect the interest of the class).

However, because it is often in a franchisor’s interest to require franchisees to litigate individually (thereby bearing the cost of litigation alone, rather than sharing them amongst the class), many if not all franchise agreements offered in the United States include so-called “class action waiver” provisions. These provisions essentially require the franchisee to agree to waive the right to initiate or participate in a class action against the franchisor in order to acquire the franchise. In addition to the potentially prohibitive cost to the franchisee associated with individually litigating a dispute, class action waiver provisions also reduce the risk of a “mega award” being imposed against the franchisor in the event that a case is heard by a hostile jury or adjudicated under unfavourable law.

Class action waiver provisions have often been the subject of litigation. In particular, franchisees claim that such provisions are unconscionable, in that they serve as an economic bar to pursuing a claim. Nevertheless, courts have concluded that such class waiver provisions are generally enforceable.

Italy Small Flag Italy

Under Italian law class actions can be promoted only by consumers, non-profit organizations and associations.

United Kingdom Small Flag United Kingdom

In England and Wales there are various procedures in the Civil Procedure Rules by which a group of claimants can bring a collective action. In addition, there are a number of further procedures applicable to claims in specialist tribunals only, such as the Competition Appeal Tribunal.

The Civil Procedure Rules sets out three procedures by which a group litigation can be brought:

  • the court can use its general (and discretionary) case management powers under Part 3 of the Civil Procedure Rules to consolidate multiple claims brought by multiple claimants; or
  • the court can join multiple claims together by making a Group Litigation Order (also known as a 'GLO') under part 19 of the Civil Procedure Rules, provided that each of the claimants has a cause of action raising common, or related, issues of fact or law; or
  • a representative claimant can bring a claim on behalf of other claimants under part 19 of the Civil Procedure Rules, provided that all such other claimants have the same interest in the claim as the representative claimant.

Canada Small Flag Canada

Franchisees are permitted to bring class actions against their franchisors in Canada. Such class actions are generally brought on behalf of franchisees when the franchisor breaches provincial franchise legislation, including when the franchisor’s conduct breaches the statutory duty of good faith and fair dealing owed to its franchisees, or the terms of the franchisees’ franchise agreements.

Updated: October 16, 2019