Tag Archives | franchise

Personal Guarantee of Franchisee Fees and Costs Upheld

What potential liabilities may owners of a terminated entity franchisee face as a result of personally guaranteeing the entity franchisee’s obligations in favor of the franchisor? As Violet Spear, the sole shareholder of Vianna, Inc., a terminated 7-Eleven franchisee in Evanston, Illinois, painfully learned, guarantors should expect to be liable for the franchisor’s attorneys’ fees […]

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States Upping The Ante For Franchisors – A Legislative Update

Laws focusing on the franchisees’ rights are referred to as relationship laws, and in recent months, franchisee groups fighting for new relationship laws have been noticeably successful, scoring legislative victories in several states. There are some significant differences among the bills currently being considered or that have recently passed, but most are intended to restrict […]

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Out Of Control – Franchisor Not Liable For Franchisee’s Negligence

Royal Dispatch Services, Inc. operates a vehicle dispatch service franchise that receives calls from customers and refers them to its franchised drivers through a computer system Royal requires the franchisees to purchase or lease from Royal. Under Royal’s franchise agreement, franchisees may use Royal’s name, signage and trademarks, must purchase late model Lincoln town cars, must […]

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Improper Termination May Be Constructive Termination

According to a US district court judge in Budget Blinds Inc. v. LeClair, a franchisee with a franchise agreement governed by Wisconsin law may be entitled to damages from its franchisor under a claim for “constructive termination” of its franchise agreement if the franchisor does not comply with the notice and cure requirements of the Wisconsin Fair […]

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Tanning Salon Burn – Non-Compete Honored In Pennsylvania

Having a well drafted franchise agreement can prove invaluable to franchisors. A recent Pennsylvania federal district court decision in Tantopia Franchising Company, LLC v. West Coast Tans of PA, LLC et al. is a perfect reminder why non-compete provisions are important. In 2002, West Coast Tans of PA entered a franchise agreement to run a Philadelphia tanning […]

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If At First You Don’t Succeed, Try, Try Again

Undeterred by last year’s disappointments, franchisees in the Golden State have regrouped this year and mounted a new offensive designed at passing franchisee favorable legislation in California. Last year, Assembly Bill 2305,The Level Playing Field for Small Businesses Act of 2012 (the “2012 Act”), was introduced in the California Assembly. The 2012 Act sought to revise California’s […]

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Personal Liability In New York For A Franchisor’s Owners

Grandmaster Flash’s lyrics “New York, New York, big city of dreams, but everything in New York ain’t always what it seems!” must be ringing in the ears of Michael and Kathy Butler (the “Butlers“) following a recent decision by the U.S. Bankruptcy Court in Charlotte, North Carolina. The court found the Butlers personally liable for […]

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