The Franchise Memorandum

In a dispute between Audi and two dealers, the Third Circuit Court of Appeals affirmed the district court’s conclusion that one dealer’s obligation in a consent decree to “forever quit” its interest in purchasing an Audi dealership survived termination of the litigation and the dissolution of a preliminary injunction and was enforceable. Audi of Am., Inc. v. Bronsberg & Hughes Pontiac, Inc., No. 20-2940, 2021 WL 5320848 (3d Cir. Nov. 16, 2021) (designated as non-precedential).

The Sixth Circuit Court of Appeals recently affirmed judgment on the pleadings in a contract dispute between Whirlpool Corporation and its former licensing agent. Whirlpool Corp. v. Equity Management, Inc., No. 20-2062, 2021 WL 5133177 (6th Cir. Nov. 4, 2021).

A federal court in Illinois recently dismissed a distributor’s claim that a competitor committed tortious interference by encroaching on the distributor’s exclusive distribution territory because the distributor failed to demonstrate—through draft agreements and other communications with the manufacturer—valid exclusive distribution rights. Midland Distrib., Inc. v. Zest US Wholesale, Inc., 2021 WL 4745265 (N.D. Ill. Oct. 12, 2021).

A federal court in New York granted a franchisor summary judgment, invalidating its purported supply agreement with a food manufacturer and wholesaler. Bonchon v. LKRG Provisions & Holdings, LLC d/b/a Frontier Food Group, 2021 WL 5042858 (S.D.N.Y. Oct. 29, 2021).

A federal court in Michigan stuck to the explicit contractual requirements in deciding whether purchase order agreements were formed between a boat manufacturer and its dealer. S2 Yachts, Inc. v. ERH Marine Corp., No. 1:18-CV-389 (W.D. Mich. Nov. 16, 2021).

A federal court in California recently granted summary judgment against a distributor that alleged that her agreement with Ralph Lauren permitted her to resell Ralph Lauren furniture in perpetuity. Card v. Ralph Lauren Corp., 2021 WL 4427433 (N.D. Cal. Sept. 27, 2021).