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Franchising: Realities and Remedies

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Harold Brown, Updated by Ebin Sandler Member of the New York Bar (ret)

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“No attorney can seriously practice franchising law...without access to this valuable book.”
Robert D. Paul, Former General Counsel of the Federal Trade Commission

Franchising: Realities and Remedies provides you with specific, practical solutions to common problems faced by both franchisors and franchisees. It covers compliance with federal and state contracts; antitrust and disclosure laws; protective advice for franchisor's counsel; the landlord in franchising; and the RICO statute.

The book—cited by the U.S. Supreme Court—also encompasses: litigation approaches and remedies available to individuals and to groups of franchisees; good-faith, fiduciary and equitable considerations; punitive damage awards; contractual arbitration; cutting litigation costs; finding the best witnesses; damages and procedural devices; trademarks; trade secrets; restrictive covenants; termination of a franchise operation; the "departing" franchisee; attorneys' fees; and the Bankruptcy Code.

Book #00569; looseleaf, two volumes, 2,480 pages; published in 1981, updated as needed.
ISBN: 978-1-58852-010-4


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  • Availability: Available
  • Brand: Law Journal Press
  • Product Type: Books
  • Edition: 0
  • Page Count: 2480
  • ISBN: 978-1-58852-010-4
  • Pub#/SKU#: 00569
  • Volume(s): 2

Author Image
  • Harold Brown

The late Harold Brown graduated from Yale University and Harvard Law School and wrote a franchising column to the New York Law Journal. He was a founder and former council member of the ABA Franchise Forum Committee, the editor or associate editor of several legal publications, as well as the author of numerous legal articles. He had testified as a franchise expert before many federal and state legislative bodies, and lectured frequently for legal and business institutes, bar associations and law schools.



Author Image
  • Updated by Ebin Sandler Member of the New York Bar (ret)

Volume 1

CHAPTER 1
Introduction to Franchising

§ 1.01 Background of Franchising
[1] New Concepts
[2] Economic Developments
[3] Structural Elements
§ 1.02 The Benefits of Franchising
[1] Advantages to Franchisee
[2] Advantages to Franchisor
[3] Benefits to Both Franchisor and Franchisee
§ 1.03 Creation and Function of the Franchise Relationship
[1] What Is a “Franchise”?
[2] Functional Aspects of Franchises
[3] Mutual Contributions of Parties to Franchise Agreement
[4] Franchise Agreements
[5] Top Ten Things that a Franchisee Should Look for in a Franchise Agreement
§ 1.04 The Cost of Obtaining and Operating a Franchise
[1] Capital Costs
[2] Operating Costs
[3] Determining Whether Benefits of Franchise Operation Justify Costs
§ 1.05 Purchases from the Franchisor and Other Suppliers
[1] Franchisor Controls Over Purchasing
[2] Economic Benefits to the Franchisor
[3] Competitive Impact of Franchisor-Imposed Restrictions on Purchasing
[4] Independent Sourcing for Goods and Services
§ 1.06 What a Prospective Franchisee Should Look for in a Franchisor and Its System
[1] Introduction-- Determining Whether to become a Franchisee
[2] Self-Evaluation by the Prospective Franchisee
[3] Evaluation of the Market for the Franchise
[4] Evaluation of Options Other Than a Particular Franchise
[5] Review the UFOC

CHAPTER 2
Control and the Power Imbalance in the Franchise Relationship

§ 2.01 Introduction
§ 2.02 Training, Supervision, and Discipline
[1] Training and Operating Manuals
[2] Supervision
[3] Discipline: Means and Purposes
§ 2.03 Effect on Franchisee of Distributorship Agreements and Marketing Schemes
§ 2.04 Effect of Franchisor’s Purchasing Requirements
§ 2.05 Transfer, Termination, Expansion, and Renewal of the Franchise
[1] Factors Affecting Transfer of a Franchise
[2] Franchisee’s Right to Transfer a Franchise
[3] Termination and Renewal
[4] Expansion of Franchise
§ 2.06 Competition Between Franchisor and Franchisee During Term of Franchise
§ 2.07 Post-Term Competition: Covenants Not to Compete
[1] Nature of Covenants Not to Compete
[2] Restraints on Competition by Franchisee After Termination of Franchise
§ 2.08 Restraints on the Franchisor; Encroachment
[1] Overview of the Encroachment Problem
[2] Encroachment and the Implied Covenant of Good Faith and Fair Dealing
[3] Encroachment by Internet Sales

CHAPTER 3
Franchising Manual

§ 3.01 Introduction
§ 3.02 Fair Business Dealing
[1] Basic Considerations
[2] Factual and Economic Analysis
§ 3.03 Conclusions

CHAPTER 4
Deception, Trickery, and Concealment in the Operation of a Franchise

§ 4.01 Introduction
§ 4.02 Factual and Economic Analysis
[1] Capital Matters
[2] Operating Matters
[3] Methods of Operation

CHAPTER 5
An Overview of Legal Problems and Remedies

§ 5.01 Preventive Program for Franchisors
[1] Avoiding Litigation Through Creation of a Valid Franchise System
[2] Risk in Using a “Packager”
[3] Subjects Requiring Substantial Time to Develop
[4] How the Franchisee Can Use the Formulation of a Franchise as a Source of Claims
[5] The Preventive Role of Franchisor’s Counsel
[6] The Preventive Role of Franchisee’s Counsel
[7] Sources of Lawyers’ Personal Liability
[8] The Lawyer’s Role in Settlements
§ 5.02 The Franchisor’s Legal Advantage and Alternatives to Individual Actions
§ 5.03 Handling the Case
[1] Who Should a Lawyer Represent?
[1A] Prevalence of Disputes
[2] General Problems
[3] Miscellaneous Procedural Devices
§ 5.03A The Realities of Alternate Dispute Resolution
[1] Introduction
[2] Overview
[3] ADR History and Reception
[3A] Mediation
[4] Federal Supremacy for Arbitration
[4A] The Potential Advantages of Arbitration
[5] Some of the Major Challenges to ADR
[6] Remedies, Recommendations and Judicial Treatment
[7] Judicial Reaction
[8] Contractual Judicial Review of Awards and Government Participation in Arbitration
[9] Enforceability of Governmental Arbitration Covenants
[10] Constructive Developments
[11]  Anti-Arbitration Legislation
§ 5.04 Outline of Legal Remedies
[1] Statutes and Common Law
[2] Litigation Factors
§ 5.05 The Landlord in Franchising
[1] Introduction
[2] Lack of Share in Successful Site
[3] Excluding the Lessor from Direct Dealing with the Franchisee
[4] Need for Security Information and Earnings Data
[5] Alterations and Restoration Costs
[6] Franchisor’s Financial Standing
[7] Exposure to Litigation and Bankruptcy Court
[8] Involvements with the Franchisor
[9] Conclusions
§ 5.06 Evaluating Whether a Franchisee or Dealer Has a Valid Claim—Performing the “Six-Step” Analysis
[1] Generally
[2] Step One: Determine the Reasons for the Challenged Conduct
[3] Step Two: Review the Written Agreement
[4] Step Three: Evaluate Potential Antitrust Concerns
[5] Look for and Analyze Potentially Applicable Franchisee Protection Statutes
[6] Step Five: Common-Law Considerations
[7] Step Six: Analyze Damages
[8] Injunctive or Declaratory Relief
§ 5.07 Procedural Ways to Cut Litigation Costs
[1] The High Cost of Litigation
[2] Choice of Venue
[3] Using a Single Complaint, With Modifications
[4] Consolidated Discovery and Case Management
[5] Class Action
[6] Alternative Forms of Consolidation
[7] Joint Trial or Use of Offensive Collateral Estoppel
[8] Overcoming Barriers to Discovery
[9] Preclusion of Counsel and Confidentiality Devices
[10] Pursuing Documents in Prior Litigation
[11] Deficiencies in Arbitration
[12] Arbitration Benefits
[13] Franchisor’s Obligations
[14] Control of Legal Fees
§ 5.07A Developments in Third Party Financial Litigation Assistance
[1] High Litigation Costs
[2] Lender Participation
[3] Modern Controls
[4] Participation of Franchisee Association
§ 5.08 Finding the Best Witness
[1] Introduction
[2] Statements From the Franchisor’s Present and Past Employees
[3] Attempted Preclusion of Testimony From Former Franchisor Employees
[4] Obtaining Evidence from Third Parties
[5] Attorney-Client Privilege
[6] Restrictions on Testimony
[7] Conclusions
§ 5.09  Procedural Fairness
§ 5.10 Effective Access to State and Private Litigation
[1] Basic State Enforcement Authority—Actions by State Attorneys General
[2] Private Right of Action

CHAPTER 6
Disclosure Regulations and Their Enforcement

§ 6.01 Introduction
[1] Regulation of Unfair or Deceptive Acts or Practices
[2] Franchisor Abuses
[3] Need for Investment Data
§ 6.02 Background for FTC Rule
[1] Enactment
[2] Deficiencies in Coverage
§ 6.03 Federal and State Relations
[1] Comity and Preemption by FTC
[2] Potential for Confusion
[3] Comity Among States
§ 6.04 Substance of FTC Rule
[1] Advance Disclosure Goals
[2] Application and Timing
[3] Non-Filing with FTC
[4] Data to Be Disclosed and Interpretive Guides
§ 6.05 Analysis of FTC Rule
[1] Ills Addressed
[2] Profitability Factors
[3] Presentment, Timing, Warnings
[4] Exclusion of Antitrust Matters
[5] Absence of Preemption
[6] Definitions
[7] Exemptions and Exclusions
§ 6.06 Comment
[1] Impact of Publicity
[2] No General Regulation of Unfair or Deceptive Practices
[3] Inclusions and Exclusions
[4] Protection
[5] Comity
§ 6.07 State Regulation
[1] Public Filing; Effect
[2] State Disclosure Process
[3] Barrier to Entry by New Franchisors
[4] Geographic Anomalies
§ 6.08 Enforcement
[1] Administrative Processing; Sunshine Impact
[2] Public and Private Action to Enforce FTC Rule
[3] Public and Private Action Under State Disclosure Statutes
[4] Private Remedy Under State “Little FTC” Acts
[5] Disclosure Responsibilities at Franchisor Trade Shows
§ 6.09  Conclusions—National Impact
§ 6.10 FTC Administrative Rulings and Advisory Opinions
§ 6.11 Comment on Disclosure of Earnings Information
§ 6.12 The Revised Franchise Offering Circular (UFOC)—Adopted in 1995
[1] Introduction—Disclosure History
[2] Application of the Revised UFOC
[3] Purpose of the Revised UFOC
[4] Scope of Comment
[5] The General Instructions for and Requirements of the Revised UFOC
[6] Forms to Be Filed with the Application for Approval of the Revised UFOC
§ 6.13 The Twenty-Three Items of the Revised UFOC With Summaries and Comments
§ 6.14 Adoption of the Revised UFOC and Technical Aspects of Its Applicability of the Revised UFOC
[1] The UFOC History
[2] The Phase-In Period
[3] Anomalies and Issues
[4] Disclosure of Capital Questions
§ 6.14A  FTC Disclosure Rules and Requirements
[1]  The Questionable Value of the FTC Rule as It Is Currently “Enforced”
[2]  The FTC Staff’s Views on Revisions to the FTC Disclosure Rule
[3]  Overview of the New Rule
[4]  Key Changes That Were Proposed and Not Made
§ 6.15 Disclosure Requirements in North America
[1] Overview of Mexican Regulations
[2] Summary of Mexican Franchise Regulations
[3] Comment
[4] Overview of Canadian Statutory Protection
[5] Application of FTC Pre-Sale Disclosure Rule to Sale of Foreign Franchises

CHAPTER 7
Other Statutes Including “Little FTC” Acts

§ 7.01 “Little FTC” Acts
[1] Introduction
[2] Statutory Development
[3] Substantive Law
[4] The Federal-State Connection
[5] Damages Under a “Little FTC” Act or Comparable Statute
[6] “Little FTC” Act Violation Related to Bad Faith and Breach of Contract
[7] Improper Procedural Matters
§ 7.02 Fair Practice Acts for Franchising
[1] Conduct Legislation of FTC Origin
[2] Specific Conduct Laws
[3]  Representative Canadian Anti-Termination Statutes
§ 7.03 State Antitrust Laws
[1] The Issue of Preemption
[2] Important State Antitrust Cases
[3] Changes in the Interpretation of Antitrust Laws
[4] Predatory Pricing—The Conflict Among the Circuits
§ 7.04 “Good Cause” Legislation
[1] Statutory Action
[2] Judicial Treatment
[2A] Right to Renewal Except for Good Cause
[3] Legislative Proposals
[3A] Prohibiting Termination Except for Good Cause
[4] Common Law Support
[5] Transfer of Franchised Business and Related Releases
§ 7.04A Prominent Business and Legal Problems of Automobile Dealers
[1] The Auto Industry--Transition to the Twenty-First Century
[2] Regulation by Industry Commissions
[3] Serious Pricing and Business Issues
[4] Dealer Protection from Encroachment
[5] Computation of Attorneys’ Fees and Costs
[6] Tortious Interference with Auto Dealer’s Selling Price for Dealership
[7] Price Discrimination Involving Car Rental Agencies
[8] Class Suit on Compulsory Advertising Contributions
[9] Consumer Punitive Damages Award for Sale of Repaired Car as a New Car
[10] Factory Markup on Price of Warranty Repair Parts
[11] Factories’ Deceptive Advertising of Auto Leasing and Credit Costs
[11A] “New Car Leasing”
[12] Dealer Sale of Its Common Stock
[13] Selection, Relocation, Encroachment
[14] Further Auto Litigation
§ 7.05 Petroleum Marketing Practices Act
[1] General Comment
[2] Statutory Definition and Preemption
[3] Judicial Interpretation
[4] Comment
[5] Concurrent State Jurisdiction
[6] Preemption of State Legislation
[7] Statutory Amendment
§ 7.06 Racketeer Influenced and Corrupt Organizations Act (RICO)
[1] Introduction
[2] The RICO Statute
[3] Prominent Legal Issues in Civil RICO
[4] Mail and Wire Fraud
[5] Affirmative Obligations of Lawyers Under RICO
[6] Combined Procedural Attractions
[7] RICO Issues Related to Other Laws
§ 7.07 The Need for Conduct Controls
[1] Standards of Conduct
[2] Broad Policy Issues
[3] Geographic Relevance
[4] Repercussions of Failure
[5] Limited Fiduciary Duty
[6] Conduct Control Rules
§ 7.08 The Failure to Enact a Federal Fair Franchising Practices Act
§ 7.09  Opposing Proposed Federal and State Franchise Legislation
[1] Franchise Membership in the IFA
[2] The Failure of Proposed Legislation
[3] The IFA Ethical Code of Conduct
[4] The Mediation Gambit
§ 7.10 Developments in Dispute Resolution Through Arbitration and Mediation
[1] Introduction
[2] Governing Procedural Rules
[3] Standards for Additional Site or Relocation Grants
[4] Standards for Contractual Disputes
[5]  Challenges to Arbitration
[6] Overall Comments
§ 7.11 Trademark or Service Mark (Lanham Act) Legislation
[1] Generally
[2] The Potential for Patent Law Claims Against Franchisees
§ 7.12 The Revised Iowa Franchise Conduct Statute
[1] Introductory Comment
[2] Specific Terms of the Iowa Statute and Comment
[3] Concluding Comment
§ 7.13 The Continuing Imperative for Federal Franchise Disclosure and Conduct Control Legislation
[1] Basic Structure of a Franchise
[2] Identification and Responsibility Matters
[3] Status or Contract
[4] Contract of Adhesion
[5] Disclosure and Conduct Control Legislation
[6] Discrimination Claims and Franchising

CHAPTER 8
Using the Common Law

§ 8.01 Introduction
§ 8.02 Franchise Misuse
§ 8.03 “Know How” Licensing
§ 8.04 Misrepresentation
[1] Common Law Fraud vs. Statutory Deception
[2] Factual Aspects in Franchising
[3] Extensions in Common Law
[4] Procedural Devices
[5] Corollaries
[6] The Variables of Misrepresentations and Nondisclosure
§ 8.04A A Fraud on the Court
§ 8.05 Interference with Advantageous Relations
[1] Substantive Law
[2] Antitrust Comparison
[3] Unfair Competition
[4] Factual Applications
[5] Related Matters
[6] Intentional Interference: Antitrust Considerations for the Competitive Privilege Defense
§ 8.06 Damages
[1]  General Discussion
[2]  Punitive Damages
[2A] Emotional Distress Damages
[3]  Contractual Restrictions on Damages and Officers’ Individual Liability
[4]  Computing Damages—The Role of the Court, Counsel and Experts

Volume 2

CHAPTER 9
Good Faith, Fiduciary and Equitable Considerations

§ 9.01 Introduction
§ 9.02 Contract and Promissory Estoppel
[1] Express Contract (Written or Oral)
[2] Promissory Estoppel
[3] Contractual Arbitration
[4] Case Law
[5] Comment on the Growing Use of Restrictive Covenants
[6] Restricted Use of Service Mark After Contested Termination
§ 9.03 Strict Construction of the Contract
§ 9.04 Existence of the Contract
§ 9.05 Superseding the Contract
[1] Various Grounds
[2] Courts Favor Big Business
[3] Preference Given to Franchisor Covenants
[4] Enforcement of Arbitration Covenants
[5] Choice of Venue
[6] Enforceability of Integration Clauses
[7] Self-Help Repossession
§ 9.06 Implied Covenant
[1] Defining the Obligation of Good Faith and Fair Dealing
[2] Unique Attraction for Collective Negotiations
[3] Application of These Principles to Franchise Duration
[4] Review and Comment on Good Faith and Fair Dealing Developments
§ 9.07 The Conflict Between the Express Agreement and the Franchisor’s Declared Policies
[1] Introduction
[2] Illustrations of Conflict-Termination of Franchise Clauses
[3] The Format of Policy Declarations
[4] Judicial Support of “Policy Declarations” in Spite of Written Agreement
[5] Implied Obligation of Good Faith and Fair Dealings
§ 9.08 Fiduciary Obligations
[1] Applicable Principles
[2] Structured Approach
[3] Franchisor Control
[4] Availability of Equity to Prevent Injustice
[5] Abuse of Trademark
[6] Federal Trade Commission Act Bars Inequitable Practices
[7] Fiduciary Duty as a Matter of Law
[8] Common Interest—Good Cause Legislation
[9] Continued Controversy
[10] Implied Covenant of Good Faith and Fair Dealing
[11] Application of Fiduciary Obligation
[12] Control Concept in Relation to Application of Other Laws
[13] General Application of Fiduciary Concept
[14] Difficulty of Overcoming Contractual Terms
[15] Extreme Control by the Franchisor
§ 9.09  Providing a Viable Business Opportunity
§ 9.10 Imposing Directly Competing Marketing Systems
[1] Propriety of Direct Sales Under Contractual and Good Faith Standards
[2] Comment
§ 9.11 Preventive Legal Services in Crafting the Agreement and in Performance
[1] Introduction—The Lawyer as “Gatekeeper”
[2] Increasing Severity of Terms
[3] The Imbalance in the Franchisor/Franchisee Relationship
[4] The Obligation of Good Faith and Fair Dealing
[5] Conclusion
§ 9.12 Area Development Agreements
[1] Historical Beginnings
[2] Encroachment
[3] Use in Developing a New Territory
[4] Use in Subfranchising
[5] Use in Flooding a Local Area
[6] Company Store Reservations
[7] Franchisee’s Impetus for Protected Territory
[8] Reacquisition Programs
[9] Conclusions
§ 9.13 Illustrative Cases on Analysis and Application of Good Faith
[1] Bad Faith Termination, Disciplinary Action and Damages Issues
[2] Encroachment, Expansion and Contract Issues
[3] Miscellaneous Cases Providing Functional Definition and Application of Good Faith Doctrine
[4] Statutory Prohibitions Against Bad Faith
§ 9.13A  A Hypothetical Franchise Case Addressing Certain Commonly Litigated Matters
[1]  Factual Background
[2]  Paying Royalties v. Keeping the Mark
[3]  Franchisee’s Claims for Running a Poor System
[4]  The Interplay Between Express Breach of Contract and Breach of the Covenant of Good Faith and Fair Dealing
[5]  Choice of Venue Issues
§ 9.14 Bad Faith--The Kickback
[1] Background Information
[2] Extortion-Like Conduct
[3] Participants and Impact
[4] Legal Remedies
[5] Comment
§ 9.15 Fairness Doctrine Under Contractual Arbitration Covenants
[1] Support for Contractual Arbitration
[2] Claim of Speedy and Less Expensive Remedy
[3] Lack of Free Choice in the Selection of Arbitration
[4] Unique Public Considerations in Franchise Substantive Law
[5] Restrictions on Damage and Counsel Awards
[6] The Dollar Cost of Arbitration
[7] Pre-Sale Disclosure
[8] Confidentiality and Discovery Factors
[9] Contractual Choice of Both Venue and Arbitration
[10] Access to Important Procedural Devices
[11] Offensive Collateral Estoppel and Use as Precedent
[12] General Damage and Other Contracted Restrictions
[13] Arbitrability of Domestic Antitrust Disputes
[14] Judicial Treatment of Arbitration Covenants
[14A] Appealability of an Order to Arbitrate
[15] Comments and Conclusions
[16] Judicial Reaction
§ 9.15A Illustrative Rescission of a General Release Plus Equitable and Tortious Relief
[1] Introduction
[2] Fact Intensive Review of Snap-On Tools
[3] Release Principles
[4] Economic Duress
[5] Legal Standards for Duress
[6] Review of Good Faith
[7] Fraud and Concealment
[8] Damage Considerations
[9] Comments
§ 9.15B Limitations on Contractual Barring of Claims
§ 9.16 Impact of the Contractual Time Tenure
[1] Introduction
[2] Local Market Factors
[3] Minimum Payments Over Entire Period
[4] Absence of Genuine Durability
[5] Reasonable Expectations
[6] Onerous Contractual Terms Imposed on Franchisees as Compared with Minimal Franchisor Obligations
[7] Predatory Covenants and Exploitation
[8] New Terms on Renewal
[9] Legislation
[10] Comment

CHAPTER 9A
Mergers and Acquisitions of Franchise Systems

§ 9A.01 Introduction
[1] Disclosure
[2] Recourse—Franchisee Causes of Action
[3] The Surge of Mergers and Acquisitions and the Developing Law
§ 9A.02  Planning the Acquisition of a Franchise System
§ 9A.03  Business Concerns and Legal Rights in a Franchise Acquisition
[1]  Franchisor’s Duty to Disclose Business Plans
[2]  Territorial Conflicts
[3]  Encroachment
[4] Transfer of an Entire Franchise System—Needed Prohibitions
§ 9A.04  Franchise Agreement Conformance
§ 9A.05 Working with Dissatisfied Franchisees
[1] Tactics to Achieve Franchisee Objectives
[2] Need for Meaningful Communication
[3] Resolving the Problems
§ 9A.06 The Acquiring Company Must Perform Due Diligence
§ 9A.07 Additional Issues
[1] Assumption of Liabilities
[2] Continued Operation of the Acquired Business
[3] Expansion
[4] Fiduciary Obligations
§ 9A.08 Examination of the Duty to Disclose Purchase or Sale Activity—The Perspective of Franchise Counsel
[1] Disclosure to Prospective Franchisees
[2] Disclosure of Merger-Acquisition Activity to Existing Franchisees
[3] When and How an Acquiring Franchisor Should Communicate with Franchisees of the Targeted System
§ 9A.09  Conclusion and General Comment

CHAPTER 9B
Renegotiating

§ 9B.01 Introduction
[1]  Opportunities for Renegotiation
[2]  Business Factors and Developments
[3]  Regularized Revisits: Franchisees’ Role
§ 9B.02 Assembling the Franchise Data
[1]  Protecting the Franchisor
[2]  Franchisee Due Diligence Review of the Franchisor
[3]  Informal Due Diligence
[4]  Good Faith in Negating Terms and Performance
[5]  Variable Good Faith Definitions
[6]  Participation with Franchisee Organization
[7]  Acceptance by the Franchisees
[8]  Periodic Revisions to Achieve Improved Methods and Procedures
§ 9B.03 Substantive Matters for Renegotiation
[1]  Areas Ripe for Change
[2]  Expansion Concerns
[3]  Reasonable Opportunity to Succeed
[4]  Sale of the Franchise System
§ 9B.04 The Ways and Means
[1]  Available Samples
[2]  Uniformity
[3]  The Interest of Respective Parties to the Contract
[4]  Consent of Franchisees
[5]  Making the Deal

CHAPTER 10
Protecting Franchisees Under the Antitrust Laws

§ 10.01 Introduction
[1] Antitrust Law and Franchising
[2] Conflict with Trademark Law
[3] Competitive Principles
§ 10.02 The Federal Trade Commission
[1] Structure
[2] Statutory Law
[3] Regulation and Enforcement
[4] Record of Performance
§ 10.03 Antitrust Principles
[1] Market Competition
[2] Per se vs. Rule of Reason
[3] Judicial Developments
[3A] Antitrust Developments
[3B] Vertical Restraint Guidelines Adopted by the National Association of State Attorneys General (NAAG)
§ 10.04 Territorial and Customer Restrictions
[1] Protecting Market Areas
[2] Functional Differences
[3] Customer Limitations
[4] Encroachment Legislation
§ 10.05 Boycotts and Concerted Refusals to Deal
[1] Principles
[2] History
[3] Direct Competitors
[4] “Dirty Tricks” or Unfair Practices
[5] Combined Practices of Franchisees
[6] Noncompete Covenants
§ 10.06 Monopolizing
[1] Localized Applications
[2] Substantive Factors
[3] Market
[4] Attempted Monopolization
[5] Combinations
[6] Franchising Cases
§ 10.07 Company Stores and Dual Distribution
[1] Purposes
[2] Conflict with Dealers
[3] Judicial Treatment

CHAPTER 11
Procedural and Collateral Matters

§ 11.01 Private Statutory Remedies
§ 11.02 Criminal Sanctions
§ 11.03 Unclean Hands
§ 11.04 Statute of Limitations
[1] General Application and Exceptions
[2] Continuing Violations in Franchising
[3] Fraudulent Concealment; “Separate and Apart” Standard
[4] Equitable Tolling
§ 11.05 General Release and Incontestability Covenant
§ 11.06 Damages in General
§ 11.07 Fact of Damage and Credits
§ 11.08 Standing and the “Direct Purchaser” Requirement and “Passing-On” Defense
§ 11.09  Amount of Damages-Calculations
[1] Calculating Damages
[2] Damages Flowing from Antitrust Violations
§ 11.10 Injunctive Relief
[1] General Principles
[2] Mandatory Injunctive Decree in Kodak
[3]  Prospective Franchisees
§ 11.11 Harassment and Retribution
§ 11.12 Class Actions and Consolidation
[1] Devices to Aid in Complex Litigation
[2] The Revival of Franchisee Class Certification
§ 11.13 Offensive Collateral Estoppel
[1] Introduction
[2] Guidelines for Application
[3] Principles Applied
[4] Other Doctrinal Preclusions
[5] Sources of Data
[6] Litigational Precautions
[7] Relation to Class Proceedings
§ 11.14 Antitrust Compliance Program
[1] Introduction: The General Need
[2] General Formula
[3] Content and Means of Accomplishment
[4] Document Retention Program
[5] Privileged Communications
[6] Conclusions
§ 11.15 Some Observations on Alternative Dispute Resolution: Arbitration, Mediation, and Negotiation
[1] Contractual Arbitration
[2] Mediation
[3] Direct Negotiations
[4] Contractual Good Faith Negotiation and Encroachment
§ 11.16 Creating and Using an Association of Franchisees
[1] Franchisees’ Needs and Goals
[2] Forming the Organization1
[3] Use of Professional Counsel
[4] Action Plans and Strategy
§ 11.17 Standards for Preliminary Dismissal Without Access to Information; Standard for Court Review

CHAPTER 12
Complex and Significant Legal Concepts

§ 12.01 Introduction
§ 12.02 Legal Implications: Which Laws to Obey
[1] Wide Assortment of Conflicting Rules
[2] Federal and State Laws
[3] Supreme Court Modifications
[4] Common Law Variables and State Law Standards
[5] Contractual Choice of Law
[6] Federal and State Constitutional Issues
§ 12.03 The Mark
[1] In General
[2] Creation of Right in the Mark
[3] Internal Rights
[4] Conflicts
§ 12.03 AProtecting or Abusing Trade Dress
[1] Introduction
[2] Standards of Protection
[3] Application of Principles
[4] Comments
§ 12.04 Using Trade Secrets
[1] Common Law Origins
[2] The Core of Franchising
[3] Uniqueness
[4] Sources of Protection
[5] Retention of Protection
[6] Secrets in Franchising
§ 12.05 Vicarious Liability to Third Persons
[1] Third Party Conflicts
[2] Tort Liability
[3] Defenses
§ 12.06 Elements in Terminating a Franchise
[1] Product and Service Franchises
[2] Legal Issues
[3] Discounters
[4] Forward Integration
§ 12.07 The Departing Franchisee or “Getting Divorced”
[1] General Considerations
[2] Holdover Franchisee
[3] Franchise’s Contractual or Legal Right to Terminate
[4]  Methods of Gaining Strength
[4A] Concerted Terminations by Franchisees
[5] Franchisor’s Contractual Post-Term Protections and Their Litigational Practicality
[6]  Litigation as a Last Resort
[7]  Legal Theories to Help the Franchisee Break Away
[8]  Make Use of Basic Concepts of Fair Play Embodied in the Prior Failed Attempts at Federal Franchise Legislation
§ 12.08 Antitrust vs. Unfair Acts or Practices
[1] Economic Justification for Small Businesses
[2] Congressional Exemptions
[3] Judicial Exemption Standards
§ 12.09  Calculation of Attorneys’ Fees
[1] Public Policy
[3] Calculable Formula
[4] Fairness Concept
[5] Percentage of Recovery Fees in Common Fund Cases
[6] Challenges to Unrestricted Contingent Fee Awards in Class Fund Cases
§ 12.10 Bankruptcy Code
[1] What Every Franchisee Should Know About Bankruptcy
[1A] Executory Contracts: Franchise Agreements
[2] Time Factors
[3] Personal Service Contract
[4] Power to Assume or Reject
[5] Impairment of Contract
[6] Effect of Action
[7] Impact on Franchising
[8] Business Strategies
[9] Executory Contracts

CHAPTER 13
Some Major Concerns About Franchising Going Forward

§ 13.01  Introduction
§ 13.02  Specific Concerns
[1]  The Disparity in Bargaining Power
[2]  The Lack of Franchisor Duties to the Franchisee and the “Broken System” Problem
[3]  Disclaimers of Fraud
[4]  The Assault on the Covenant of Good Faith and Fair Dealing
[5]  Inactivity of Enforcement Agencies
[6] Recommended Franchisee Responses

APPENDICES
Index