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The Franchise Memorandum

The Franchise Memorandum

Posts in Franchisee Associations.

In a surprising decision that conflicts with numerous previous opinions on the same topic, a senior judge in the District of Connecticut declined to dismiss a complaint filed by a franchisee association against Edible Arrangements alleging breach of contract, breach of a duty of good faith and fair dealing, and violation of the Connecticut Unfair Trade Practices Act. EA Independent Franchisee Association v. Edible Arrangements, International, Inc. 2011 U.S. Dist. Lexis 78008 (D. Conn. July 19, 2011). Significantly, the franchisee association brought these claims in the form of ...

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A Delaware state court has resolved an ongoing dispute regarding the control of advertising strategy in the KFC franchise system. In KFC Nat'l Council & Advertising Cooperative, Inc. v. KFC Corporation, No. 5191-VCS (Del. Ch. Jan. 31, 2011), the dispute was between KFC and its franchisees over the authority of the KFC National Council and Advertising Cooperative (NCAC) to determine the national advertising strategy for the KFC brand. KFC argued that it had sole authority to develop advertising plans, and the NCAC (whose governing body consists of 13 franchisee representatives ...

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In Sound Security, Inc. v. Sonitrol Corp., 2009 WL 1835653 (W.D. Wash. June 26, 2009), franchisor Sonitrol served nonparty discovery requests on the Sonitrol National Dealers Association (“SNDA”), an association of Sonitrol franchisees. SNDA moved the court for an order shifting the costs of complying with those discovery requests to Sonitrol, arguing that as a nonparty to the litigation, it should not be required to bear the cost of responding. The court denied that motion and ordered SNDA to bear its own costs and attorneys’ fees.

The court found that Sonitrol’s ...

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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