Zoe Evans & Ors. v Anytime Clubs UK Limited & Anor.

This case was about a disputed Google advertisement for a gym in Stratford-upon-Avon and, more importantly, about who should properly be in the lawsuit.

The court was not deciding the final trade mark infringement or passing off claim. It was deciding interim applications about party selection, strike out, summary judgment, joinder and costs.

The result was that the local franchise company, Tribe Health Clubs Limited, was joined to the claim, the branch manager was removed, and the claim against the UK master franchisor, Anytime Clubs UK Limited, was struck out.

The key commercial lesson is narrow but useful. A franchise relationship and brand-control wording do not, by themselves, make a master franchisor an arguable defendant for a local ad. The court wanted evidence connecting the franchisor to the specific advertisement.

The claimants were the owners and users of the Xtreme Gyms brand in Stratford-upon-Avon. Mrs Zoe Evans and Mr James Evans jointly owned the registered UK trade mark for the words "Xtreme Gyms". Through Xtreme Gyms Limited, they ran a gym business in Stratford. The judgment also records earlier use of the Xtreme brand for boot camps in the area.

On 10 May 2021, they became aware of a Google advertisement headed "Xtreme Gyms, Stratford Leisure Centre". It was not disputed that the ad promoted a Stratford gym that formed part of the Anytime Fitness group.

The business structure behind that gym mattered. Anytime Clubs UK Limited held the UK master franchise rights. It had granted a franchise in March 2016 to Tribe Health Clubs Limited to operate the Stratford Anytime Fitness club. Ms Josie Osbourne, who was originally named as the second defendant, was an employee of Tribe and the general manager of that branch.

The claimants complained to Anytime UK on 10 May 2021 and later issued proceedings on 7 June 2021. Evidence from Anytime UK's solicitor said the complaint had been passed to Tribe and that Tribe confirmed the ad had been disabled on 7 June 2021.

That did not end the dispute. A former Tribe employee, Samuel Dale, said he had received twenty to thirty calls from potential members who mentioned Xtreme Gyms, and that some of those people were likely to have joined Tribe after seeing the ad. The judge treated that as enough to show the claim could potentially involve significant, rather than insignificant, damages.

By the time of the hearing, the court had to sort out several practical issues before the case could move forward. The claimants wanted Tribe joined. Ms Osbourne wanted the claim against her struck out. The claimants then applied to replace Ms Osbourne with Tribe. Separately, Anytime UK asked the court to strike out the claim against it or give summary judgment in its favour.

The main legal issue was not whether the Google ad definitely infringed the Xtreme Gyms trade mark. The court instead had to decide whether the claimants had a real prospect of continuing their claim against Anytime UK, the master franchisor, and whether Ms Osbourne should remain personally named.

The claimants advanced two routes against Anytime UK. First, they argued that Anytime UK had enough control and approval rights over Tribe's advertising to be jointly liable for the alleged infringement. Secondly, they argued that Tribe acted as Anytime UK's agent when arranging the Google ad, which would make Anytime UK vicariously liable.

The judge noted that neither argument had been pleaded, but was prepared to look past that for the purpose of the application. He said that if either argument gave the claimants a real prospect of success, he would allow them the opportunity to amend their particulars of claim, especially because they were acting without professional representation.

The court therefore examined the franchise agreement clauses relied on by the claimants and the evidence about what actually happened with this ad. It also had to deal with service and costs issues concerning Ms Osbourne, and with the practical correction of the defendant list so that Tribe, the local operating company, became the relevant defendant.

The court first dealt with the defendant list. By consent, Ms Osbourne was removed as a defendant. Tribe was then joined as a defendant because it was represented at the hearing and consented to being joined.

On Ms Osbourne's costs, the court made no order. The judge accepted that there may never have been a satisfactory basis for suing her, but he also accepted that a letter sent on her behalf had proposed that her costs would be waived if the claim against her was dropped. Since the claimants then applied to replace her with Tribe, the judge held that the proposed arrangement should be observed.

The more important ruling concerned Anytime UK. The court looked first at section 6C of the franchise agreement, under the heading "Advertising and Promotion". That clause showed that Anytime UK had the option to require Tribe to submit proposed advertising for prior approval. But the evidence from Anytime UK's solicitor was that this option had not been exercised and that Anytime UK only became aware of the advertisement on 4 June 2021.

The claimants also relied on section 3 of the franchise agreement, headed "Marks and Copyrights", especially provisions dealing with use of the Anytime Fitness marks and prior written approval for the style, form and use of the words "Anytime Fitness" in advertising and online materials.

The judge held that those provisions were primarily directed to how Tribe could present the Anytime Fitness name to the public. Subject to the requirement that the words "Anytime Fitness" be represented in an approved manner, those clauses did not deal with advertisements paid for or arranged by Tribe in the way the claimants suggested. The judge also noted that the ad complained of did not use the words "Anytime Fitness" as part of the advertisement itself, although they appeared in the internet address.

Taking those points together, and accepting the evidence that Tribe had never submitted its proposed advertising to Anytime UK, the judge concluded there was not even an arguable ground for alleging that Anytime UK was jointly liable for infringement by reason of the Google ad.

The agency argument failed as well. The judge said there was nothing in the franchise agreement suggesting that Tribe could enter into advertising agreements, or any other agreements, so as to bind Anytime UK, or that Tribe had ever purported to do so. On that basis, he could see no arguable ground for saying Tribe acted as Anytime UK's agent.

The result was that the claim against Anytime UK was struck out. The judge added that if the claimants later had good reason to think the evidence given on instructions was untrue, that could be raised with the court and there might be cause to rejoin Anytime UK. But on the material before the court, the complaint would go forward only against Tribe.

The court awarded Anytime UK its costs of the application, assessed at £7,000. The judge said he was not persuaded that costs should be awarded on the basis that the claimants had acted unreasonably, but he did retain the view that Anytime UK was entitled to its costs.

This decision is useful, but it should be read carefully. It does not create a broad rule that franchisors are never liable for franchisee advertising. Nor does it decide the final merits of the underlying trade mark and passing off claims.

What it does show is how a court may test liability theories at an early stage. If you say a franchisor is responsible for a local ad, you need more than a general franchise relationship and more than broad brand standards. You need a contractual and evidential link to the specific ad complained of.

For franchisors, the case highlights the difference between having rights in a contract and actually using them. A clause saying you may require prior approval of local advertising is not the same as evidence that you did require approval for the ad in dispute. If your business wants tighter control, your systems and records need to show that control being exercised.

For franchisees and local operators, the case is a reminder that local advertising can create direct exposure. If the local company arranged or paid for the ad, it may be the main target in a trade mark or passing off claim, even if it trades under a larger network brand.

For claimants and rights owners, the procedural lesson is just as important as the trade mark lesson. Before issuing a claim, identify the legal entity that actually operated the site, placed the ad or instructed the marketing. Be cautious about naming employees personally unless there is a proper basis beyond job title or branch role.

The judgment also shows the value of evidence about commercial impact. The ad had apparently been disabled quickly, but witness evidence about calls from potential customers was enough for the judge to treat the damages claim as potentially significant.

The court's reasoning turned on a small number of practical documents and facts.

First, the franchise agreement mattered. Section 6C showed that Anytime UK had an option to require prior approval of proposed local advertising. That helped define the relationship, but it did not prove that approval had actually been required or given for this ad.

Secondly, the clauses about use of the Anytime Fitness marks mattered, but only in a limited way. The court read them as rules about how the franchisee could present the franchisor's own brand, not as a basis for saying the franchisor was responsible for every ad the franchisee arranged.

Thirdly, the evidence about knowledge and approval mattered. The court accepted the evidence given on instructions that Anytime UK only became aware of the ad after the complaint and that Tribe had not submitted proposed advertising for approval.

Fourthly, the ad's content mattered. The judge noted that the advertisement itself did not use the words "Anytime Fitness", even though those words appeared in the internet address. That supported the court's reading of the contractual clauses relied on by the claimants.

Finally, witness evidence about customer calls mattered. It helped show that the claim was not necessarily trivial just because the ad had been disabled.

The judgment was handed down on 29 April 2022 in the Intellectual Property Enterprise Court, part of the High Court.

It is best read as an interim procedural decision about strike out, summary judgment, joinder and costs in a franchise advertising dispute. It is not a final ruling on whether the Google advertisement infringed the Xtreme Gyms trade mark or amounted to passing off.

Its lasting value for businesses is practical. It shows how courts may separate a local operator from a master franchisor when the evidence does not connect the franchisor to the specific advertising act complained of.