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.
Owners of trademarks understandably sue licensees when licensees continue to use the owners’ trademarks after owners have retracted their authorization to use them.
Renewals have always been a hot topic in the franchise world. Not surprisingly, most, but not all, of the legal history on renewals shows franchisees to be the definitive losers.
As a franchisee attorney I’m unable to even begin to put a number on how many times I’ve received calls from distressed franchisees claiming that they are victims of “unfair discrimination” by their franchisors. And, these callers
always have a strong view on the legality of such discrimination.
The practice of franchise law is a niche area when it comes to the representation of franchisors. Franchise attorneys draft complicated, tedious Franchise Disclosure Documents that must comply with the Federal Trade Commission Revised Rule as well as certain state disclosure law.
Over the years I have moved from envy of lawyers who represent, and can brag about being the lawyers for, celebrity clients, to happiness that I rarely represent celebrity clients.
