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Big Wins: Franchise Law – Breach of Contract

Franchisor Disputed Obligation to Provide Reasonable Assistance

In 2016, we successfully argued, on behalf of a nationwide group of Cottman franchisees, that where a franchisor expressly commits to provide assistance, it must provide reasonable assistance, not just any level of assistance.

Franchise Failed to Provide Site Selection Assistance

In Linda R. Mike v. Mail Boxes, Etc. (1995), we argued that the franchisor materially breached the franchise agreement by failing to provide adequate site selection assistance. The arbitrator agreed, and awarded the plaintiff $80,000 in damages.

Franchisor Wrongfully Charged the Franchisees

In Weight Watchers of Palm Beach County, Inc. v. Weight Watchers International, Inc. (2001), we successfully argued that the franchisor had wrongfully charged the franchisees for the cost of mailing labels. The arbitrator awarded the franchisee $103,000 in damages.

Franchisor Breached the Covenant of Good Faith and Fair Dealing

In TCBY Sys., Inc. v. RSP Co., Inc., et al., 33 F.3d 925, Bus. Franchise Guide (CCH) ¶ 10, 518 (8th Cir. 1994), the Court of Appeals for the 8th Circuit held that the covenant of good faith and fair dealing implies a reasonableness requirement to the franchisor’s specified contractual undertakings, and affirmed the jury’s determination that the franchisor had breached that requirement by not providing reasonable site selection assistance.

Franchise Failed to Provide Site Selection Assistance

In Town & Country Equip., Inc. v. Deere & Co., Bus. Franchise Guide (CCH) ¶ 11,958 (W.D. Tenn. 2000), the court held that a franchisor may have breached the dealer agreement as well as the implied covenant of good faith and fair dealing by unreasonably denying the dealer’s request to relocate its franchise, by imposing unreasonable performance criteria on the dealer, and by interfering with the dealer’s efforts to sell the franchise.

Supplier’s Prices Must be Reasonable with Uniform Commercial Code

In Capital Equipment, Inc. v. CNH America, LLC, 2004 WL 3406091 (E.D. Ark. 2004), the court held that where a supplier sells equipment to a dealer pursuant to an open price term, the price charged must be reasonable and fixed in good faith consistent with the Uniform Commercial Code.


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