Tag Archives | Franchisor

Trademark Infringement: High Stakes Gamble

Something franchisees must know: Franchisees that continue to use their franchisors’ registered trademarks after their franchise agreements have been properly terminated by their franchisors could face crippling damage awards. Under the federal Lantham Act, courts may award an injured franchisor “treble damages” -three times the amount of damages actually suffered-for willful and knowing trademark infringement, and […]

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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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Beer & Wine Franchisees Enjoy Protection From Termination

Many states, including California and Ohio, have laws protecting beer and wine distributors from the arbitrary termination of their distribution agreements by their manufacturers. Ohio’s Alcoholic Beverage Franchise Act (the “Act“) allows a successor manufacturer that acquires all or substantially all of the stock or assets of another manufacturer to terminate a distribution agreement upon 90 days […]

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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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Reporting Sales and Paying Taxes: A Double-edged Sword

Typically, franchise agreements require franchisees to comply with all civil and criminal laws and provide that franchisees will be in default under their franchise agreements if any of their franchise owners commits a felony or other offense that is injurious to the “System” or the franchisor’s marks. In Dunkin’ Donuts Franchising, LLC v. Oza Bros., Inc., Dunkin received […]

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Franchisees – Say No To Uniform Pricing and Promotion Mandates

After Steak N Shake Enterprises, Inc. (“SNS“) entered into 5 franchise agreements (the “Franchise Agreements“) with Stuller, SNS adopted a policy (the “Policy“) requiring franchisees to “follow set menu and pricing …, and to offer all company promotions as published.” Stuller refused to comply with the Policy because, Stuller said, compliance was not required under […]

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Franchisors With Franchisees In Iowa Are Subject to Iowa Income Tax

On December 30, 2010, the Iowa Supreme Court upheld the state’s ability to tax out-of-state franchisors based solely on the use of their intangibles by franchisees located in the state. This decision, although not unexpected, will lead to increased enforcement efforts in Iowa, and perhaps other states.   In KFC Corporation vs. Iowa Department of Revenue, […]

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