BUSINESS_LAW_NOTES-_POST_PRELIM_2

BUSINESS_LAW_NOTES-_POST_PRELIM_2 - BUSINESS LAW NOTES:...

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BUSINESS LAW NOTES: POST PRELIM 2 Franchise 1. Background/nature of franchise 2. Existence of franchise (dialist case?) 3. Operation a. Vicarious liability (cigarette clove/holiday inn?) 1. Actual agency 2. Apparent agency b. Franchise Agreement (camp creek) 1. Covenant of good faith and fair dealing 4. Termination of Franchise (el pollo loco- court most likely to side w. franchisor, pizza hut- middle ground…pizza hut did everything by the book, dunkin donuts- most likely to side w. franchisee) 5. Antitrust (mcdonalds, Microsoft!) 6. Consumer claims (Pelman, Atkins) a. products liability b. negligent misrepresentation c. unfair competition/ deceptive trade practices 3 types of law: statutory, _______, and equitable Franchise=license to use a name Benefits of having franchises=can increase the popularity, the spread, the profits eftc. Of your business without using your own money! Aop= area in which franchisee has exclusive franchise rights (area of protection) Ufoc= uniform franchise offering circular: must do this to publicly offer your franchise, set up legally required disclosures about the franchise, why federal law? Blankenship v. Dilast International Corporation Issue: franchise??
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Termination of Franchises El Pollo Loco V. Hashim The franchiser brings the lawsuit to the franchisee. El pollo loco is the plantiff. Sending a default letter to Hashim would not be sufficient. Hashim says he’s still selling the chicken even after the default letter and that he is still entitled to do it Company has to go to court Hashim has a KFC franchise too! You can’t do this! Competition Both companies would be concerned about trade secrets MOST OF ALL, THERE IS A CONFLICT OF INTEREST If he had a pollo loco and a KFC, it would be different, not a direct competitor He lies about having a KFC franchise when he signs up for El Pollo Loco Cease and assist letter: if El Pollo Loco sent one to say he no longer has their lisence. ..he may not necessarily follow it, and he could keep operating under their name (TRADE LISENCE) and could even screw them over…aka serve bad chicken under their name! El Pollo Loco asks for a termination of the franchise agreement (THROW HIM OUT!) They are asking for a preliminary injunction: means he has to stop operating IMMEDIATELY (before the lawsuit!) El Pollo loco says that monetary damages would not even suffice.(irreputable damage!). He needs to be stopped before the case. Hashim says he’s entitled to have time to fix things. It says in the contract (p. 4) signed by Hashim that the company has the right to immediately shut the franchise down if he does anything that reflects negatively on the business (material misrepresentation ---section H).
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It would be material if he actually told the truth about having a KFC! Therefore it is material that he lied about it. If he lied about his middle name being Bob (doesn’t apply to the case) this would not be material
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This note was uploaded on 02/15/2012 for the course BLAW 1310 taught by Professor Hale during the Fall '11 term at Texas State.

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BUSINESS_LAW_NOTES-_POST_PRELIM_2 - BUSINESS LAW NOTES:...

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