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Post-Termination Enforcement of Franchise Agreements
A particularly vexing issue for franchisors is enforcing the post-termination obligations against the former franchisee, and against others acting in concert to usurp the benefits of the franchise relationship after it has expired or terminated. The issue usually arises where a restrictive covenant prohibiting competition exists, and the covenantor attempts to circumvent the restriction by having a trusted party continue in the business. A recent decision in New Jersey federal court provides some insight on how to address these issues.
In Jackson Hewitt v. Barnes Enterprises, 2013 U.S. Dist. LEXIS 111390, D. NJ No. 10-cv-05108 (Aug. 2, 2013), the U.S. District Court for the District of New Jersey again had the opportunity to address post-termination enforcement against signatories to a franchise agreement. In the previous 2011 decision, the franchisor alleged a former franchisee was planning on using his father to operate 15 competing tax-preparation businesses to circumvent a covenant against competition. The court agreed to enforce the covenant against the non-signatory father. The court held that injunctions of this type are generally broad enough to encompass nonparties who have actual knowledge of the prohibited acts and are seeking to nullify the decree by aiding and abetting the prohibited acts. In 2013, the parties filed cross-motions for summary judgment.
The defendant franchisee and its personal guarantor sought dismissal of the claim that they had infringed on the Jackson Hewitt trademark after termination. They argued that Customers First, a company owned by the guarantor's wife, was the post-termination operator of the businesses that used the Jackson Hewitt signage at the former locations. The defendants moved for summary judgment because they did not operate the business under the Jackson Hewitt signs after termination and therefore were not infringers.
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.
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.
Warehouse Liability: Know Before You Stow!
As consumers continue to shift purchasing and consumption habits in the aftermath of the pandemic, manufacturers are increasingly reliant on third-party logistics and warehousing to ensure their products timely reach the market.
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.
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.