Told one thing, sold another: why a £3.4m franchise claim failed
A man was told a trampoline park would cost £1.5 million to build. It cost £2.4 million. The business went into administration and he sued the franchisor and one of its directors for £3.4 million.
He lost the entire claim without ever getting to trial. Worse, the court then entered judgment against him for £849,288 on the franchisor’s counterclaim.
The case is Gibbons v Gravity Franchise Limited [2026] EWHC 2089 (Comm), decided in Leeds and handed down on 6 August 2026. If you are signing anything on the strength of what you were told in a meeting, this blog is probably worth six minutes of your time.
What he says he was told
The claimant said he was told five things: that the project would cost no more than £1.5 million; that the model was proven and would produce profits of £55,409, then £393,061, then £336,122; that the recommended builder was trustworthy and competent; that he would get a £100,000 contribution plus some rent free time; and that the franchisor would stand as guarantor for £400,000 of funding.
None of those five things appeared in the contract he signed.
What he actually signed
The letter of intent said the investment could be as much as £1.5 million, that local conditions would dictate the figure, that it could exceed that amount, that he had taken professional advice and done his own due diligence, and that he was not relying on any statement made by the franchisor.
The franchise agreement went further. It said the written document was the whole agreement, that neither side had any remedy for anything said before signing, and that the franchisor gave no promise about sales or profits. It carved out fraud, as every such clause must. Those exclusions are pretty common in franchise agreements.
He had solicitors advising him throughout.
Why he lost
The exclusion and limitation clauses worked. An entire agreement clause combined with a “you are not relying on anything we said” acknowledgement wipes out claims for ordinary and careless misrepresentation. That left him one route only: proving deliberate dishonesty.
He could not get near that. Proving fraud means pleading specific facts that point to dishonesty rather than to a mistake or bad luck. His argument was that a similar park in Northampton had reportedly cost £3.2 million, so the franchisor must have known £1.5 million was wrong. The judge pointed out that the £1.5 million figure had never been based on Northampton, and that his own project cost £2.4 million, which was well below the Northampton figure anyway. There was nothing else.
He also never set his case out properly. The other side asked him, in writing (called a Part 18 request), to say for each promise who made it, when, in what words, and whether it was dishonest or merely careless. He replied that it would be “a complete and intentional waste of my time” to do so, and handed over 1,288 pages of documents instead. The court rules require details of misrepresentation and fraud to be spelled out. Representing yourself does not change that: the Supreme Court confirmed in Barton v Wright Hassall [2018] UKSC 12 that litigants in person get some latitude at the margins and no more.
Because his defence to the £849,288 counterclaim was simply “my claim answers it”, the counterclaim succeeded the moment the claim fell away.
The moment that decided it
In December 2019, before signing, he emailed the franchisor. He said that if the build went over budget he could be bankrupt before he opened, and asked what written assurance they could give him that costs would not exceed £1,405,115.
He never got one. He did not chase it. He signed anyway.
That is the whole case in three sentences. He asked exactly the right question, got silence, and treated silence as comfort.
What to take from this
- If the deal only works because of a number you have been told, that number belongs in the contract as a warranty, a cap or a price adjustment. A conversation will not survive an entire agreement clause.
- If you ask for something in writing and do not get it, that is your answer. Do not sign around it.
- Forecasts are not promises. If you are relying on projections, ask what assumptions sit behind them and get the reply by email.
- “You are not relying on anything we told you” clauses are negotiable. At the very least, carve out the specific figures and answers you are actually relying on.
- Adding a director as a personal defendant makes your case harder, not easier. You have to show they took responsibility personally rather than on behalf of the company.
And if you are the franchisor
Read the other way round, this is a demonstration of what a well-drafted document pack does. A prospectus with a genuine range and disclaimer, a letter of intent recording advice taken and no reliance, and a franchise agreement with a proper entire agreement clause. That combination defeated a £3.4 million claim before anyone had disclosed a single document. It is worth checking whether yours would do the same.
The caveats
This was a decision on strike out and summary judgment, not a trial on the evidence, and it turns on its own facts. The judgment should appear on Find Case Law under citation [2026] EWHC 2089 (Comm). This article is general commentary, not advice on your situation.
If you are about to sign a franchise agreement, or your own franchise paperwork has not been looked at in a while, get in touch.
