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Court Watch

By Cynthia M. Klaus and Susan E. Tegt
November 29, 2012

Franchisor's Termination Proper After Series of Default Notices

The U.S. District Court for the Southern District of Ohio addressed several issues important to franchisors and their legal counsel last month in Burda v. Wendy's Int'l, Inc., Bus. Franchise Guide (CCH) ' 14,908 (S.D. Ohio Oct. 9, 2012). First, the federal court tackled the issue of whether a franchisor could properly terminate a franchise after providing numerous notices of default over a series of several months, but then terminating the franchise prior to the contractual 30-day cure period set forth in the franchisor's last notice of default. The federal court also addressed whether a franchisee's claims may be dismissed if the franchisee executed a general release during the course of the franchise relationship.

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