Franchisees Sue Franchisors Seeking to Terminate Franchise Programs
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Court Watch
In two recent cases, franchisors were accused of improperly undermining or terminating franchises that continued to operate under franchise systems that the franchisors intended to phase out for financial reasons. While in one case the franchisor allegedly intended to coerce its existing franchisees to convert to a new franchise program that would be more profitable for the franchisor, in the other case, the franchisor was accused of terminating a franchisee after concluding that its fledgling franchising system was not as profitable as expected.
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