Wednesday, June 01, 2011

Focus on Franchising

This posting was written by John W. Arden.

News and notes on franchising and distribution topics:

□ The program for the 34th annual meeting of the ABA Forum on Franchising has been released by the American Bar Association. Entitled “Flying the Flag of Franchising,” the meeting will be held October 19-21, 2011 in Baltimore. The meeting will start with three concurrent intensive programs on Wednesday, October 19: Fundamentals of Franchising, Best Practices for Managing Your Franchise Disclosure and Registration Practice, and Anatomy of a Franchise Litigation Case. Highlights of the regular two-day program are two plenary sessions (the annual presentation on franchise and distribution law developments and a session on techniques to improve communications and enhance outcomes) and 24 workshops. Other events include a newcomers’ networking night, the annual reception/dinner at the B&O Railroad Museum, a community service event, and a tour of Annapolis. The meeting will be held at the Marriott Baltimore Waterfront. The program co-chairs are Michael K. Lindsey and Karen B. Satterlee. Further details regarding the meeting appear here on the ABA website.

□ The International Distribution Institute will present a conference on agency, distribution, and franchising on June 16-18 in Amsterdam. Among the scheduled presentations will be a panel discussion on the ICC international franchising model contract (with John Pratt, John R.F. Baer, Carl Zwisler, Dedier Ferrier, and Guy Gras); appointing an agent/sales representative for the U.S. (John R.F. Baer); establishing a franchising network in the U.S.: a general overview (Carl Zwisler); a panel discussion on applicable law and jurisdiction (John Pratt, Carol Xueref, Thomas J. Tallerico, and Carl Zwisler); and what a franchisor should know before negotiating a franchise agreement in Brazil, China, Japan, and the United States (Carl Zwisler, Luciana Bassani, Paul Jones, Souichirou Kozuka, and John R.F. Baer). Further details are available here.

□ The national Girl Scout organization’s constructive termination of a Wisconsin council as part of a plan to eliminate two thirds of the councils nationally violated the Wisconsin Fair Dealership Law (WFDL), according to the U.S. Court of Appeals in Chicago. The national organization attempted to implement a “realignment plan” due to a decline in membership. In a decision written by Judge Richard Posner, the Court of Appeals held that the council qualified as a dealership within the WFDL. “From a commercial standpoint, the Girl Scouts are not readily distinguished from Dunkin’ Donuts,” the court stated. “The principal or at least the most readily defensible objectives of dealer protection laws is to prevent franchisors from appropriating good will created by their dealers.” These concerns apply to nonprofit enterprises that enter into dealership agreements as defined by the law, the court observed. The complaining council “manages a rolling inventory of Girl Scout-branded cookies, operates camps that are identified as ‘Girl Scout camps,’ and proselytizes for Girl Scouting in the communities that it serves, building up good will both for the local council and the national brand.” Thus, the court declined to read an exemption for nonprofits into the WFDL. Contrary to the national organization’s claim, the realignment of the councils was not “good cause” for termination or change in the competitive circumstances of the council. “There is no evidence that the proposed redrawing of boundaries is ‘essential’ or even helpful to the attainment of the national organization’s expressive goals.” The appeals court directed the federal district court in Milwaukee to enter summary judgment for the council on the WFDL claim. The May 31 decision is Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America. It will be reported in CCH Business Franchise Guide.

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