Circuits' decisions may make franchisee victory short-lived
Article Abstract:
The federal district court cases of Wilson v. Mobil Oil Corp. and Collins v. International Dairy Queen, Inc. revive the antitrust theory of attacking franchisor-imposed exclusive supply agreements. The courts found an illegal tying agreement by the franchaisor because of a requirement that franchisees buy supplies only from a franchisor-approved source. The courts relied on the Supreme Court rationale in the Kodak decision, but circuit court decisions suggest that their impact will be short-lived as long as franchisors disclose any purchase restrictions before the signing of the franchise agreement.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1997
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Post-'Kodak' class actions target manufacturers; suits by independent service organizations may fail if there are conflicts within the class
Article Abstract:
Lawsuits modeled after the US Supreme Court's Eastman Kodak Co. v. Image Technical Services, Inc. are bound to increase, but a decision favorable to the defense may be possible before trial. Manufacturers must be ready for concerted early action to prevent class certification and being forced into settlement. In these cases, independent service organizations (ISOs) usually file claims against the integrated manufacturers of complex, high-technology products. ISOs usually accuse the manufacturer of unlawfully tying its parts to its service and of trying to monopolize the service aftermarket.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1997
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A recent case arising under Florida law permits a U.S. franchisor to be sued by a foreign franchisee. But did the court go too far in establishing a cause of action?
Article Abstract:
A federal district court ruled in Nieman v. Dryclean U.S.A. that suits under Florida law could be filed against franchisors who offer and sell franchises to foreign nationals for units located abroad, even though no similar cause of action existed under federal law. The court also held that the Florida Unfair and Deceptive Trade Practices Act created a private cause of action for violations of a Federal Trade Commission rule on franchising and business opportunity ventures. The decision is a signficant departure from existing case law and FTC practices.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1998
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- Abstracts: The real insiders; SEC may take securities trading issue to Supreme Court. Nobody's child: the way Americans go about caring for abused and neglected kids is a mess; the only way to fix a system that fails everyone may be for juvenile court judges and lawyers to take charge
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