Quest faces court case over franchisee’s alleged unfair termination

By Sarah Stowe | 17 Nov 2021 View comments

Serviced apartment hotels franchise Quest is facing a court case brought by a franchisee alleging the franchisor is acting unfairly by terminating a franchise agreement.

The case was filed in the Federal Court on Thursday 12 November. by lawyers Clayton Utz.

The franchisee, Quest Acquisitions No 3 Pty Ltd, alleges it has a further 14 years to operate two franchises in Frankston, Victoria, and Singleton in New South Wales, and was in discussions with the franchisor about how to proceed but in October was unexpectedly issued with termination notices based on the expiration of the current terms, Lawyerly reports.

A statement from Quest indicated the franchisor is aware of a proceeding against it in the Federal Court but the proceeding has not yet been served..

Commenting on the case a spokesperson told Inside Franchise Business “The franchisee did not exercise options to renew two franchises for further terms under and in accordance with the clear terms of the applicable franchise agreements. 

“Quest has subsequently issued notices to terminate both of the expired franchises. These and related matters, are the subject of the franchisee’s claims in the proceeding.”

Quest denies any wrongdoing.  

“Quest does not consider it appropriate to make any further comment at this time, as the proceeding remains pending before the Court,” the spokesperson said.

Clayton Utz was contacted for comment.