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Court Watch

By Cynthia M. Klaus and Meredith A. Bauer
February 25, 2011

Preliminary Injunction Prevents McDonald's Franchisee Termination

As always, a recent case reminds us that franchisors should carefully watch their representations to franchisees at the time of contracting. Although not expressly provided for in any written agreement, a California court recently decided that a franchisee of several McDonald's restaurants was reasonably likely to succeed on the merits of his claim that the franchisor had agreed to renew three franchises with fewer than five years remaining on the agreements when it approved of the franchisee's purchase of the restaurants from another franchisee. Husain v. McDonald's Corp., Bus. Franchise Guide (CCH) ' 14,530 (Cal. Super. Ct. Dec. 20, 2010).

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