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Making the Case for the Benefits of Uniformity and Predictability

By Arthur L. Pressman
July 09, 2004

Uniformity and predictability are often lacking from judicial treatment of cases involving vicarious liability claims against franchisors, yet uniformity and predictability are the hallmarks of a successful franchise system, and the engines that have driven franchising to occupy such a prominent position in the domestic and worldwide economy.

Franchise agreement contract terms frequently reflect very legitimate operational and legal concerns of franchisors. With franchisees all over the country and beyond, a forum selection clause and a home-state choice of law clause make eminent good sense, at least to franchisors ' notwithstanding the denomination of out-of-state forum selection and choice-of-law clauses as “risk factors” to some states regulating franchise sales. A franchisor should, the argument goes, have the benefit of uniformity and predictability that comes from having its home state laws applied by its home state courts or arbitrators to all legal issues arising under its agreements with its far-flung franchisees.

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