As the medical marijuana industry continues to grow, medical marijuana franchise business models have become more popular. In fact, recently we reviewed a franchise agreement for a business that provides doctor recommendations for using medical marijuana in California.
Automobile dealerships were the first type of legally recognized and regulated franchises. In fact, in 1937 Wisconsin enacted the first state law protecting car dealers from wrongful termination and non-renewal.
Under a development agreement, a franchisor offers a franchisee the opportunity to buy the right to develop franchises in a broad geographical territory. Typically, development agreements are separate from franchise agreements, and they require the developer to open a particular number of franchised stores within a number of years.
A recent case decided by the United States Circuit Court for the Sixth Circuit, La Quinta v Heartland Properties, shows again the animosity that most Courts, especially federal Courts, have towards franchisees.
Almost every franchise agreement includes a post-term covenant not-to-compete whereby the franchisor has the right to thwart a franchisee’s right to operate or own a competitive business after the expiration or termination of the franchise agreement.