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The Role of Motive in Franchise Termination Cases
Should the franchisor's motive in a franchise termination case ever become the central issue? Some courts answer that seeking the true reason for termination is the target inquiry, as if a franchisor could not have a mixed motive for termination. The question turns the trial into a search as to whether the franchisor has breached an implied covenant of good faith and fair dealing which augments the terms of a written franchise agreement. Often the outcome depends on where in the life of the franchise relationship the dispute arises. At the end of the relationship, courts considering the propriety of termination and nonrenewal often treat the role of good faith and fair dealing differently than when, for example, reviewing whether the franchisor imposed unreasonable standards of performance.
In the recent series of cases, Dunkin' Donuts, Inc. v. Liu, Bus. Franchise Guide (CCH) ' ' 12,392, 12,393 (ED Pa., 2000-2002), the franchisee was unsuccessful in asserting that the franchisor had an improper motive in terminating the franchises. Dunkin' as franchisor had filed a complaint alleging termination was warranted based on its franchisees' failure to obey all laws, particularly by committing willful tax offenses and/or by knowingly making false statements on tax returns and credit statements. Franchisees claimed they relied on the erroneous advice of their accountants and that Dunkin' had an improper motive for terminating the franchise. Based upon a Magistrate's Report and Recommendation, the District Court denied Dunkin's motion for summary judgment on its claims, finding that franchisees may not have knowingly violated the “obey all laws” clauses. The District Court granted Dunkin's motion for summary judgment dismissing the franchisees' counterclaims for breach of contract and fraud because the evidence did not support the counterclaims that the franchisees failed to receive the contractually mandated operations manual and training.
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
Risks of “Baseball Arbitration” in Resolving Real Estate Disputes
“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.
Disconnect Between In-House and Outside Counsel
'Disconnect Between In-House and Outside Counsel is a continuation of the discussion of client expectations and the disconnect that often occurs. And although the outside attorneys should be pursuing how inside-counsel actually think, inside counsel should make an effort to impart this information without waiting to be asked.