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Court Watch

By Susan H. Morton and David W. Oppenheim
February 01, 2004

Franchisor Did Not Breach Contract and Franchisees Had Duty to Pay Fees

The U.S. District Court for the Western District of Kentucky has ruled that restaurant franchisor KFC Corporation did not breach its franchise agreement with franchisees as claimed, and that the franchisees were liable for their unpaid royalties and advertising fees. KFC Corporation v. Robert H. Mott, __ F.Supp.2d __, 2003 WL 22709071 (W.D.Ky. 2003).

In an action against a number of its franchisees, KFC moved for partial judgment on the pleadings. KFC sought judgment on its claims of: 1) breach of franchise and advertising agreements by two of the franchisees; 2) breach of a promissory note by another franchisee; and 3) breach of personal guarantee agreements by Robert and Phyllis Sherita Mott, the owners of the franchisee entities. KFC contended that the defendants admitted liability with respect to these claims and admitted that KFC suffered damages in the approximate amount claimed by KFC.

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