Big Wins: Territorial Rights and Franchise Expansion
Sale and Development Rights
Successfully represented a three-location fine dining franchisee, pushing back against the franchisor’s threatened termination of these franchise rights, as well as the franchisee’s significant exclusive territorial store development rights, and effected a successful sale of those three locations and those development rights, for $19 million. (2019)
Franchise Expansion Jury Award
In Foy v. Super 8 Motels, Inc., et al., (1998), a jury awarded our franchisee client $450,000 because the franchisor did not allow the franchisee to expand. Even though the deadline for expansion in the written franchise agreement had expired, we argued, and the jury agreed, that the deadline had been extended by the parties’ course of dealing.
Franchise Territorial Rights Arbitration
In Rose Equipment v. Freightliner (1999), we recovered approximately $1.2 million for a Freightliner dealer in an arbitration. We showed that the manufacturer’s direct sales to our client’s best customer violated the contract, the covenant of good faith and fair dealing, and amounted to a de facto termination without good cause, even though the dealer continued in business.
Franchise Expansion Jury Award
In Blaske v. Burger King (1994), we obtained a jury verdict in federal court for approximately $960,000, successfully arguing that the parties’ written contract, as augmented by the parties’ course of dealing and the covenant of good faith and fair dealing, was violated when Burger King denied this Minnesota franchisee the right to open a Burger King franchise in the Mall of America.
Franchise Territorial Rights Arbitration Injunction
In Nortex et al. v. Drug Emporium (2000), a panel of three New York arbitrators issued an injunction preventing our clients’ franchisor from encroaching on our franchisees’ exclusive territories with the franchisor’s Internet web site.
Franchise Expansion
Dunafon v. Taco Bell Corp., Bus. Franchise Guide (CCH) ¶ 10,919 (D.C. Mo. 1996) (an oral agreement to allow a franchisee to expand may have been formed by the course of dealing between the parties despite the absence of any such agreement in the written agreement, which contained an integration clause; franchisor may have violated the covenant of good faith and fair dealing by denying the president of the Franchise Association an opportunity to develop additional franchises).
