385 outline for final-good - 1. How Franchises are Created:...

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1. How Franchises are Created: Franchise agreement Blankenship v. Dialist - Corporation sold a franchise illegally. - Is the franchisee entitled to the return of the full amount paid for the franchise? Plus attorney fees? YES! NOTES: P’s alleged franchisee status affirmed by CT b/c CT found corp. had sold franchise in violation of Franchise Disclosure Act A franchise means a contact or agreement oral or written, expressed or implied between two or more persons by which (1) a franchisee is granted the right to engage in the business of offering, selling or distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor, and (2) the operation of the franchisee’s business pursuant to such plan or system is substantially associated with the franchisor’s trademark, service mark, trade name, logotype, advertising or other commercial symbol designating a franchisor or its affiliate (3) the franchisee is required to pay, directly or indirectly, a franchise fee of $100 or more. Franchise Disclosure Act - a franchise exists if the following three criteria are met: 1. Granted the right to offer, sell, distribute product under marketing plan suggested by franchisor 2. Use of the name, trademark, trade name, service mark, or other commercial symbol 3. Franchisee must pay $100 or more in franchise fee 4. Plaintiff is entitled to the costs of the action including, without limitation, reasonable attorney’s fees Marketing plan: Plan relating to some aspect of conducting a biz that specifies price, discounts, sales display and/or equipment, sales technique Dunkin Donuts V. Minera - breach of contract for under-reporting gross sales - counterclaim: breach of obligation of good faith in the franchisee agreement Minerva = DD franchisee in Florida
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DD’s offers Minerva a new franchise agreement where you need 2/3 of the local franchise owners to approve advertising Minerva says NO because of new rules regarding advertising where area people vote on methods… could hurt her business DD’s = pissed; they think Katherine is not giving them all % of her earnings. DD’s suspects Katherine is UNDER-REPRESENTING sales (which is not allowed) No where did she give DD’s permission to AUDIT her business, but they did illegally. Audit shows Minerva not paying DD right % of earnings. DD’s audits again. DD sends note terminating franchise. Minerva continues to use their name and run them. DD’s files suit for FAILING TO RECORD AND REPORT SALES & FAILING TO PAY DD’s THEIR FAIR % of SALES MINERVA files counterclaim stating that DD’s breached obligation of good faith, fiduciary, and violated the Florida Deceptive and Unfair Trade Practices Act DD’s did not bring Preliminary Injunction … they knew they’d lose Preliminary injunction is a court order forbidding party from engaging in specified acts Court Found: - DD’s retaliating for Katherine “not playing with the team”
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This note was uploaded on 02/07/2012 for the course HADM 387 taught by Professor Sherwyn during the Spring '08 term at Cornell University (Engineering School).

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385 outline for final-good - 1. How Franchises are Created:...

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