February 2007

By Keith D. Klein and Kenneth R. Costello

California caught the attention of international franchisors and franchisees who have arbitration clauses in their franchise agreements in the recently filed opinion in Gueyffier v. Ann Summers, Ltd. ___ Cal.App.4th ___, 2006 WL ___ (2d Dist. Oct. 26, 2006). The decision held that an arbitrator exceeded his authority when he ignored provisions in a franchise agreement that limited the circumstances under which he was permitted to find the franchisor in breach.

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