Following the Supreme Court's holding in State Oil Co. v. Khan, 522 U.S. 3 (1997) that maximum price fixing was no longer a per se antitrust violation, some franchisors have imposed deep discounting on their franchisees through resale price caps.
Under the FTC Franchise Rule, a franchisor is required to disclose in Item 6 of its Franchise Disclosure Document (FDD) all recurring or occasional fees associated with operating a franchised outlet.
Over the years, countless numbers of current and prospective franchisees have asked us a variation of the same question: will the non-competition covenant in my franchise agreement be enforced?
One court got it right. In Too Tall, Inc. v. Sara Lee Bakery Group, Inc., the U.S. District Court for the District of New Mexico denied Sara Lee's motion to strike the distributor's jury demand, notwithstanding that the subject distribution agreement contained a bilateral jury trial waiver.
Benjamin Franklin long ago remarked that an ounce of prevention is worth a pound of cure. Based upon a recent adverse ruling against Quizno's and in favor of its former franchisee, Mr. Franklin might well agree that the going rate for a pound of cure can be quantified as $350,000 in damages plus attorney's fees.
Seinfeld devotees likely are familiar with the often-used phrase "nobody put a gun to your head", such as in the following exchange in which Jerry and Kramer discuss the idea of renting a house in Tuscany:
