Timely Reminder: Franchise Agreements, Joint Venture Agreements and Bullying

Franchising and LicensingCommercial DisputesLitigation
Written By Jemimah Fitzgerald

The Supreme Court of Queensland provided several key reminders in relation to the interaction between joint venture agreements and franchise agreements, particularly, that parties must conduct business affairs in an appropriate manner.

In SHRL Ventures Pty Ltd v Pedro-X Pty Ltd [2026] QCA 119, a dispute arose between two companies working together in a joint venture agreement (JVA). The purpose of the JVA was to acquire and conduct a Pack & Send franchise (Business). The joint venture itself was short lived, with operations lasting less than 2 months.

It was alleged that one party, SHRL Ventures Pty Ltd (SHRL) routinely bullied another Pedro-X Pty Ltd (Pedro-X) and failed to attend to the affairs of the Business with sufficient diligence. Following an oral agreement, a buy out agreement (Buy Out Agreement) was negotiated between the parties in which SHRL would purchase Pedro-X’s interests in the Business.

Pedro-X did not sign the Buy Out Agreement and transfer documents. Despite the unsigned documents, SHRL contacted the franchisor to inform them that the JVA had been terminated and that SHRL had assumed full control of the Business.

The Court held in favour of Pedro-X in the first instance; however, the finding was appealed by SHRL on several grounds.

The Decision and Reminders for Businesses

Ultimately, the Court dismissed all points of appeal with costs and found in favour of Pedro-X.

The decision is a timely reminder for businesses that:

  • bullying may constitute a breach of provisions of a JVA;

  • bullying may constitute a breach of a franchisee agreement;

  • a JVA may incorporate and infer compliance with a franchise agreement as a term of the JVA itself; and

  • acts of bullying and non-attendance to the affairs of a business are attributable to the company, not simply to the party perpetrating that conduct.

For more information regarding franchising or joint venture agreements, please contact:

Alasdair Woodford
Principal
T: 03 5225 5217 | M: 0436 456 144
E: awoodford@ha.legal

Joseph Flanagan
Senior Associate
T: 03 5226 8504 | M: 0491 307 550
E: jflanagan@ha.legal

Tayla Berger
Senior Associate
T: 03 5226 8559 | M: 0407 825 365
E: tberger@ha.legal

Jemimah Fitzgerald
Lawyer
T: 03 5225 5219
E: jfitzgerald@ha.legal

Prepared with the assistance of Pippa Duniam.

Jemimah Fitzgerald