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No Harm to Franchisees When Franchisor Acquires Competitor
It is becoming increasingly common for franchise companies to acquire their competitors. Predictably, the franchisees of the acquired system often will feel threatened and take legal action.
In Hanson Hams, Inc. v. HBH Franchise Company, LLC, Bus. Fran. Guide (CCH) '13,093 (Dec. 20, 2004), the U.S. District Court, Southern District of Florida, recently considered such a case. In Hanson Hams, a Heavenly Ham franchisee filed a complaint against the franchisor of the HoneyBaked Ham franchise system for allegedly “unfair” conduct occurring after the defendant's subsidiary acquired the Heavenly Ham franchise system. Plaintiff alleged that after the acquisition, defendant favored the Honey-Baked Ham system over the Heavenly Ham system and that such disparate treatment violated Florida's “little FTC Act” (Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Florida Statutes ”501.201, et seq.). In a thorough and well-reasoned decision, the court concluded that defendant's conduct was not unfair within the meaning of the FDUTPA as a matter of law. The court found it particularly telling that the plaintiff had not asserted any claim against its franchisor (a subsidiary of defendant).
As a starting point, the court noted that to establish an “unfair practice” under the FDUTPA, plaintiff would need to prove that: 1) defendant's conduct “offends established public policy” or is “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers”; and 2) it sustained “actual damages proximately caused” by a violation of the FDUTPA. Plaintiff asserted that defendant's control of the competitive systems “pits franchise siblings against one another while placing the parent [defendant] … in a position where it can favor (and has favored) one franchise system over another by way of promotion, development and support.” Plaintiff theorized that defendant's apparent favoritism of the HoneyBaked Ham system was part of its “systematic” strategy to “strangle” the Heavenly Ham system despite having just recently purchased it.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?