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District Court Dismisses Franchisee's Tying Claim Because Market for Franchises Was Not Relevant Market
Posted in Antitrust

An Ohio federal court recently dismissed a franchisee’s claim against its franchisor for illegal tying in violation of Section 1 of the Sherman Act. Arnold v. Petland, Inc., No. 2:07-cv-01307 (S.D. Ohio Mar. 26, 2009). The Arnolds, owners of a failed Petland franchise, claimed, after being supplied with sick puppies and stale pet food, that Petland illegally tied the purchase of puppies and pet food from Petland’s preferred supplier to the ownership of the Petland franchise. Noting that dismissal of a tying claim is appropriate where a plaintiff has improperly limited its definition of a product market for the tying product to exclude potential substitutes, the district court held that the Arnold’s alleged relevant market, “the market for pet store franchises,” was unreasonably narrow in light of “equivalent investment opportunities….”

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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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