This is Part II to our previous blog regarding non-competition agreements. Part I described the legitimate business interests that satisfy the first part of the rule of reason test, the test which determines whether or not a non-competition provision will be enforced in the franchising context. The second part of the rule of reason test focuses on the …
We have previously written on this blog concerning non-competition agreements in franchising. We also have several pages on our web site devoted to the topic, both in terms of drafting or handling non-competition agreement disputes. The topic keeps coming up in our practice and we have found that it bears a closer examination. We have researched the …
This morning we received an email blast from Field Fisher Waterhouse, a UK firm, reporting on a recent Kentucky case (Doctors’ Associates, Inc. v. Uninsured Employers’ Fund, 2011 WL 5878145) on the subject of franchisor vicarious liability. The Kentucky Supreme Court found that Doctors’ Associates, Inc., which owns the “Subway” trademark and franchises the right …
Franchise Agreements are notorious for containing “choice of law” provisions that favor franchisors in a distinctly one-sided fashion. However, a franchisor manitaining strict control over the workings of its franchise agreement does not always guaranty a favorable result. Consider the following: A classic case of “be careful what you ask for” … The case 1-800-Got Junk? …
Many agreements, such as franchise agreements, include provisions requiring arbitration in lieu of litigation. The rationale for that inclusion is the perception that arbitration offers a quicker resolution at less cost. In a recent New York Law Journal article, Victoria A. Kummer opines that standard arbitration provisions do not guarantee “a speedy and inexpensive alternative to court …
Einbinder & Dunn, LLP recently successfully defended franchisees at trial against a franchisor’s claim for lost profit damages from the franchisees’ alleged violation of the non-competition and non-solicitation provisions of the parties’ franchise agreement. Although the court found against the franchisees on the breach, the franchisor’s attorneys failed to demonstrate that the breach resulted in …
Einbinder & Dunn, LLP just obtained a preliminary injunction in Federal District Court on behalf of a franchisor, enjoining a former franchisee from operating at its former franchise location as well as at a second non-franchise location. In Singas v. Ganesha Oak, Case No. 10-cv-8976 (SDNY), defendants opened up a competing pizza restaurant approximately seven miles …
Defining the authorized and appropriate use of a franchisor’s trademarks lies at the heart of every franchise agreement. The trademarks are in many ways the franchisor’s most valuable asset. The franchisee’s obligations in this regard carry serious ramifications and penalties if those obligations are not met, intentionally or otherwise. A recent case in the Eastern …
Unauthorized Use of Franchisor’s Trademarks Is Very Risky Read More »
Rights to assignment are crucial to franchisees and have been discussed in this Blog previously. Less discussed, but just as important, is the franchisor’s right to assign. Many franchisees buy into a system in reliance on the franchisor’s reputation and experience. Franchisees are not aware that franchise agreements frequently give to the franchisors an unfettered …
One of the interesting and frustrating things about practicing franchise law is the dizzying manner in which the law is evolving. Because the franchise model extends into virtually every industry, the legal developments come in every conceivable area of practice. It is very difficult for the practitioner to remain current. Here are a couple of …
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