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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.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
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.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.