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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.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.