One of the most common provisions in franchise agreements is the “forum-selection” clause. This article examines the forum-selection provision and a recent case involving such a provision, Maaco Franchising Inc. v. Tainter.
Category: Legal Perspectives
Franchisee Who Ignored His Disclosure Document Loses Lawsuit
A franchisee who sued his franchisor for fraud learned the hard way why it’s important to read the Franchise Disclosure Document, cover to cover, before buying a franchise. The California Court of Appeals ruled against him because the disclosure document Big O gave to the franchisee before he bought contradicted each and every one of his claims.
Franchisor Unsuccessful In Relying On Exculpatory Clauses To Avoid Fraud Claim By Franchisee
A recent Wisconsin Court of Appeals case addresses the use of exculpatory clauses in franchise agreements, and determines that the clauses relied upon by the franchisor to avoid liability were both insufficiently specific and not conspicuous. As a result, the exculpatory clauses failed to protect the franchisor against fraud claims by the franchisee.
Listen To My Interview On The Franchise Radio Network
Last week I was interviewed on The Franchise Radio Network, a weekly podcast / radio show. I talked about the franchise industry in general, as well as legal issues specific to franchising. You can find the interview here.
General Release Of Claims Enforced Against Former 7-Eleven Franchisees
A recent decision from a federal court in California addresses the enforceability of a general release of claims signed by former franchisees.
Hawaii Court Says Distribution Agreement Is Not A Franchise
A federal court in Hawaii recently issued an opinion finding that a distribution agreement is not a franchise under Hawaii’s Franchise Investment Law. Where the distributor: (1) is not permitted to “substantially associate” its business with the manufacturer; and/or (2) pays only the bona fide wholesale price for its merchandise (and no other form of compensation) to the manufacturer, the relationship will typically not be considered a franchise under state laws.
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