U.S. Lawyers Should Not Draft Canadian Franchise Documents Without Consulting Local Counsel: Ontario Bar Association Group

This posting was written by Peter Reap, Editor of CCH Business Franchise Guide. 

The Ontario Bar Association Franchise Law Section posted a message on the ABA Forum on Franchising email listserv yesterday, warning U.S. franchise lawyers not to prepare Canadian franchise agreements, ancillary documents, and franchise disclosure documents without consulting Canadian counsel.

With the permission of the Chair of the ABA Forum, the 24-lawyer Executive group of the Ontario Bar Association Franchise Law Section sent an email to the Forum on Franchising membership, “so as to caution ABA Forum members on the inadvisability and risk of this practice.”

“While many U.S. lawyers will directly retain or arrange for their clients to retain qualified Canadian counsel to prepare or at least review these franchise documents, that is not always the case,” the message explained.

“We assume that most of the members of the ABA Forum are aware of the growing complexity involved in Canadian franchise documents, especially disclosure documents, as a result of various articles, papers, presentations at Forum programs, and messages on the Listserv,” it continued. “Courts in the Canadian provinces are regularly interpreting the provisions of provincial franchise laws and regulations, and making decisions that affect substantive provisions of franchise documents. Now with five separate provincial franchise laws, the preparation of Canadian disclosure documents has become even more complicated.”

Nevertheless, U.S. lawyers who are often highly qualified specialist in their own jurisdictions are preparing Canadian franchise documents containing significant errors or omissions, according to the group. “These lawyers are not professionally qualified to prepare Canadian franchise documents or give advice in respect of the laws of a foreign jurisdiction.”

The group expressed concerns about the risks to franchisors being advised on Canadian (and particularly, Ontario) franchise matters by lawyers not trained or qualified to practice law in the jurisdiction. “The statutory remedy of rescission for non disclosure or incomplete disclosure is very harsh, and has elevated the potential risk to lawyers who are not qualified to undertake this work. Unfortunately, this impact and risk can extend to those who sign disclosure document certificates and those involved in the sale and granting of franchises. Further, it may constitute the unauthorized practice of law in a particular province.”

U.S. franchise lawyers should consider whether their insurance provides coverage for professional negligence in preparing documents or giving advice on Canadian law, the group advised.

The message concluded with an invitation to contact any member of the Section Executive group, whose names and email addresses were included. All or most of the members are associate members of the ABA Forum on Franchising, according to Section Chair Larry Weinberg, who sent the message.

ABA Forum on Franchising at 35: “Getting Better and Better”

The posting was written by John W. Arden.

During his “State of the Forum” speech at the ABA Forum on Franchising’s annual meeting last week in Los Angeles, Forum Chair Joseph J. Fittante reported that, in its 35th year, the Forum was “getting better and better.”

While other legal conferences are seeing a fall off in attendance, the Forum’s annual meeting boasted a near-record of 829 registered attendees. The Forum continues to have one of the highest participation rates of any ABA group.

The quality of the Forum’s presentations, written materials, and publications continue to be of the highest level, according to Fittante, a shareholder of Larkin Hoffman Daly & Lindgren in Minneapolis. The success of the Forum is attributable to the participation of the membership and the efforts of the governing committee and senior leadership, he said.

That leadership took time out of the general business meeting to thank former ABA Forum coordinator Kelly Rodenberg for nearly 15 years of working with the group. Rodenberg recently left her position with the ABA, but was in attendance at the meeting. She was recognized for guiding the group through earthquakes, snowstorms, hurricanes, and labor strikes.

Past chair Susan Gruenberg related how the group was able to hold a planned annual meeting just weeks after the 9/11 attacks because of Rodenberg’s efforts to renegotiate contracts and process many cancellations from members who were not willing to travel.

Leadership Election

During the annual business meeting of the three-day forum, the group elected Deborah S. Coldwell of Hayes and Boone, LLP in Dallas to serve a two-year term as Forum Chair, commencing in August 2013. The Forum membership also elected four members to serve three-year terms on the Governing Committee, commencing in August 2013.

The new at-large members of the Governing Committee are Christopher P. Bussert of Kilpatrick Townsend & Stockton LLP in Atlanta; Leslie Curran of Plave Koch PLC in Reston, Virginia;  Andrew Loewinger of Nixon Peabody LLP in Washington, DC; and David W. Oppenheim of Kaufmann Gildin Robbins & Oppenheim LLP in New York City. Diane Green-Kelly of Reed Smith in Chicago was elected to a two-year term on the Governing Committee, to fulfill the remainder of Deborah Coldwell's unexpired term.

Highlights of the annual meeting included a plenary session on time management skills for lawyers and the Annual Franchise and Distribution Law Developments program, presented by James Goniea and Peter Silverman. Program co-chairs for the 2012 Forum on Franchising were Leslie D. Curran and Michael D. Joblove.

The 2013 annual meeting is scheduled for October 16 - 18, 2013 at the Rosen Shingle Creek Resort in Orlando, Florida.

ABA Forum on Franchising Presents Rudnick Award to Judith Bailey

This posting was written by John W. Arden.

Phoenix franchise attorney Judith Bailey is the 2012 recipient of the Lewis G. Rudnick Award, the ABA Forum on Franchising’s “lifetime achievement award” for franchise attorneys. The award was presented today during the group’s 35th annual meeting in Los Angeles.

Besides having a long and distinguished career as a franchise lawyer, Bailey served the Forum in many capacities for many years. She was the first woman to serve on the group’s governing committee and was instrumental in the formation of the women’s caucus. Today, women make up 50 percent of the governing committee, and members of the women’s caucus represent one-third of the entire membership of the Forum, according to Joseph Fittante, Chair of the Forum on Franchising.

Bailey attended every annual meeting from 1979 through her retirement in 2005 and helped create the Fundamentals of Franchising mini-program, which has become a “core curriculum” of the Forum, Fittante said.

The Rudnick Award was created in 2009 in remembrance of Lewis Rudnick, a founding member of the Forum and its second chair, who died in January 2009. He helped establish the Franchise Law Journal, the Forum’s quarterly publication. As senior partner of Rudnick & Wolfe (currently DLA Piper), he trained several generations of some of America’s leading franchise lawyers.

The Award is intended to honor those who have made substantial contributions to the Forum and to franchise law as a discipline, while comporting themselves in accordance with Lew Rudnick’s high standards of professionalism.

Previous Rudnick Awards were presented to John R.F. Baer of Greensfelder, Hemker & Gale, P.C.; Rupert M. Barkoff of Kilpatrick Townsend; and Andrew C. Selden of Briggs & Morgan.

The Forum on Franchising also conferred its Young Leadership Award on Alexander Tuneski of Kilpatrick Townsend in Atlanta for his work with the Newcomer’s/Young Lawyer’s Division events, the Forum service projects, and Franchise Law Journal.

ABA Forum on Franchising “Continues to Be Strong”

This posting was written by John W. Arden.

The American Bar Association Forum on Franchising “continues to be strong, gain membership, and surpass expectations for attendance at annual Forums,” said Forum Chair Joseph J. Fittante during an October 21 “State of the Forum” address at the group's annual meeting.

Attendance at the annual meeting was up nearly 4 percent over last year, drawing 773 to the Marriott Waterfront Hotel in Baltimore. In 2010, 746 attended the annual meeting at the Hotel Del Coronado near San Diego. Last year’s turnout was a huge rebound from the 650 attending the 2009 annual meeting in Toronto.

A highlight of the last year was a survey of membership, which revealed one theme—members’ desire for more opportunities to be involved, said Fittante, a shareholder of Larkin Hoffman Daly & Lindgren in Minneapolis.

The Forum website has more information on opportunities to write for the quarterly Franchise Law Journal and the quarterly Franchise Lawyer newsletter. There are also opportunities to join Forum sub-groups, including the International Franchise and Distribution Division, the Corporate Counsel Division, the Litigation and Alternative Dispute Resolution Division, the Solo and Small Firm Network, the Membership Committee, the Program Committee, the Publications Committee, the Technology Committee, and the Diversity Committee.

Governing Committee Election

During the annual business meeting of the three-day forum, the group elected four new members of the governing committee by adopting—by voice vote—the report and recommendation of the nominating committee.

The new members of the governing committee are Deborah Coldwell of Hayes & Boone in Dallas/Fort Worth; Natalma McKnew of Smith Moore Leatherwood in Greenville, South Carolina; Karen Satterlee of Hilton Worldwide in McLean, Virginia; and Will K. Woods of Baker Botts LLP in Dallas.

Forum Awards

This year, the group did not present its Lewis G. Rudnick Award for substantial contributions to the development of the Forum and to franchise law as a discipline. The “lifetime achievement award” was given to John R.F. Baer in 2009 and to Rupert Barkoff and Andrew Selden in 2010.

The Young Leader Award was presented to Nicole Zellweger for her speaking, writing, and involvement in the Newcomer’s Network and Women’s Caucus. The Chair’s Explorer Award was given to Christian Thompson. The latter award is designed for newcomers to the Forum who have demonstrated an interest in pursuing a career in franchise law.

Highlights of the annual meeting included a plenary session on “Speed Reading People: Techniques to Improve Communications and Enhance Outcomes” and the Annual Franchise and Distribution Development session, presented by Lee J. Plave and Stuart Hershman.

Program co-chairs were Michael K. Lindsay and Karen Satterlee.

The 2012 annual meeting is scheduled for October 3-5 at the JW Marriott in Los Angeles. Further information regarding the Forum on Franchising appears here on the ABA website.

Forum on Franchising Solicits Nominations for Annual Awards

This posting was written by John W. Arden.

The ABA Forum on Franchising is seeking nominations for its four annual awards—the Lewis G. Rudnick Award, the Chair's Award for Substantial Written Work or Presentation, the Chair's Future Leader Award, and the Chair's Explorers Award.

The Lewis G. Rudnick Award is a lifetime achievement award, honoring those who have made “substantial contributions to the development of the Forum and to franchise law as a discipline—by publishing scholarly articles; writing or editing texts; speaking at franchise law meetings; serving the Forum as an officer, committee chair or member, or journal editor; and/or recognized accomplishments as a practicing franchise lawyer—while comporting themselves in accordance with Lew Rudnick's high standards of professionalism, decency and collegiality.”

Since its inception in 2009, the Rudnick Award has been presented to longtime franchise practitioners and Forum leaders John R.F. Baer of the Greensfelder firm in Chicago, Rupert Barkoff of Kilpatrick Stockton in Atlanta, and Andrew Selden of Briggs and Morgan in Minneapolis.

The Chair's Award for Substantial Written Work or Presentation will recognize a young and/or diverse lawyer who has published a scholarly article in ABA The Franchise Law Journal or The Franchise Lawyer newsletter, or prepared a paper and presented a workshop at a Forum annual meeting.

The Chair's Future Leader Award will be presented to a young and/or diverse Forum member who has demonstrated a substantial commitment to the Forum by undertaking significant leadership efforts, such as mentoring other Forum members or law students; working on membership marketing or other outreach efforts; assisting with special projects undertaken by the Forum Governing Committee or a Forum Division; or assisting with the Forum's annual meeting.

Last year, the Future Leader Awards were given to Dawn Newton of Fitzgerald Abbott & Beardsley LLP in Oakland, California and Jane Edmonds of Cassels Brock in Toronto.

The Chair's Explorers Award is designed for newcomers to the Forum who have demonstrated an interest in pursuing a career in franchise law. Any Forum member who is or has been a Governing Committee member or ad hoc member is ineligible to receive a Chair's Award.

Nominations for these awards should be sent by September 1 to Forum Chair-Elect, Joe Fittante at: jfittante@larkinhoffman.com. Fittante and Ron Gardner will choose the recipients, subject to the approval of the Forum Governing Committee, and the awards will be presented during the 34th Annual Forum on Franchising, October 19-21, in Baltimore.

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.

ABA Forum on Franchising Is “Healthy and Stable,” Says Chair

This posting was written by John W. Arden.

The American Bar Association Forum on Franchising remains “healthy and stable,” in spite of the nation’s economic woes and the ABA’s overall loss of membership, said Forum Chair Ronald K. Gardner during an October 15 “State of the Forum” address.

The group’s membership is down about two percent this year, a smaller decrease than experienced by the ABA overall. Attendance at last week’s annual meeting was up significantly from the 2009 meeting.

Last year, 650 attended the annual meeting in Toronto, nearly 200 fewer than the near-record number of 836 who attended the 2008 meeting in Austin. This year’s meeting, held at the Hotel Del Coronado near San Diego, rebounded to draw 746.

Financially, the Forum is “extraordinarily strong,” due to the efforts of Finance Officer Harris J. Chernow and his predecessors, said Gardner, managing partner of Dady and Gardner P.A. in Minneapolis.

“In the next couple of years, we hope to return to steady membership growth,” he said.

During the annual business meeting, the group elected new officers and governing committee members by adopting—by unanimous voice vote—the report and recommendation of the nominating committee.

Joseph J. Fittante, Jr. of Larkin Hoffman Daly & Lindgren Ltd. will serve as chair of the group from 2011 to 2013. Other members of the Governing Committee will be Kerry Bundy of Faegre & Benson (2011 to 2014); Eric Karp of Witmer Karp Warner & Ryan LLP (2011 to 2014); Kathy Kotel of Carlson Restaurant Worldwide (2011 to 2013); James Goneia of Aamco (2011 to 2013); Diane Green-Kelly of Reed Smith (2011 to 2013); and Michael Lindsey of Paul Hastings (2011 to 2013).

Highlights of the annual meeting included a plenary session entitled “Strategic and Tactical Decision-Making: What Do Your Peers Think of Your Decisions,” led by Kerry L. Bundy, Dr. Melissa M. Gomez, Harris Chernow, and Joseph Schumacher, and the Annual Franchise and Distribution Developments session, presented by Bethany L. Appleby and William K. Whitner.

Program co-chairs were Deb Coldwell of Hayes & Boone LLP and Kathy Kotel of Carlson Restaurants Worldwide, Inc.

The 2011 annual meeting is scheduled for October 18-21 at the Baltimore Marriott Waterfront Hotel in Baltimore. The program chairs will be Michael Lindsey and Karen Satterlee.

Barkoff, Selden Receive Rudnick Award from ABA Forum on Franchising

This posting was written by John W. Arden.

Rupert M. Barkoff and Andrew C. Selden are co-recipients of the second Lewis G. Rudnick Award for their contributions to the American Bar Association Forum on Franchising and the development of franchise law. The award was presented on October 14, during the Forum’s annual meeting in San Diego.

Barkoff, a partner in the Atlanta office of Kilpatrick Stockton LLP, and Selden, a shareholder in the Minneapolis office of Briggs and Morgan, are former chairs of the Forum on Franchising and members of the group’s governing committee.

In announcing the award before the opening session of the annual meeting, Forum chair Ron Gardner noted that both recipients practiced franchise law for nearly 40 years, have been consistently recognized as outstanding practitioners, have served as leaders and active members of the Forum, and together created the Fundamentals of Franchising, a signature program used to train novices about the intricacies of franchise law. They are co-editors of the book, Fundamentals of Franchising, which is in its Third Edition.

The Rudnick Award was created last year in remembrance of Lewis Rudnick, a founding member of the Forum and its second chair, who died in January 2009. He helped establish the Franchise Law Journal, the Forum’s quarterly publication. As senior partner of Rudnick & Wolfe (currently DLA Piper), he trained several generations of some of America’s leading franchise lawyers.

The Award is intended to honor those who have made substantial contributions to the Forum and to franchise law as a discipline, while comporting themselves in accordance with Lew Rudnick’s high standards of professionalism.

The inaugural Lewis G. Rudnick Award was presented to John R.F. Baer of Greensfelder, Hemker & Gale, P.C. at last year’s annual meeting.

Future Leaders Awards

In addition to the Rudnick Award, the Forum bestowed the 2010 Future Leader Awards to Dawn Newton of Fitzgerald Abbott & Beardsley LLP in Oakland, California and Jane Edmonds of Cassels Brock in Toronto.

ABA Antitrust, Franchise Groups Announce New Officers

This posting was written by John W. Arden.

The American Bar Association has announced new officers for its Section of Antitrust Law and Forum on Franchising.

On August 10, Allan Van Fleet, a shareholder of Greenberg Traurig LLP, started a one-year term as chair of the ABA Section of Antitrust Law. Head of the firm’s litigation practice group in Houston, Van Fleet is also a member of Greenberg Traurig’s global antitrust litigation and competition law practice group.

In the official announcement, he pledged to maintain the quality of the section’s programming, publications, and public comments on competition and consumer protection topics.

Van Fleet has served in numerous leadership roles in the Section of Antitrust Law, including vice chair, committee officer responsible for oversight of 27 substantive committees, delegate to the ABA House of Delegates, and chair of committees on legal ethics and professional responsibility, business torts and unfair competition, and continuing legal education.

A graduate of Rice University and Columbia University School of Law, he has been active in the State Bar of Texas, as former director and current member of a committee to revise the state rules of professional conduct for lawyers.

On August 1, several officers of the ABA Forum on Franchising began new terms. Michael Joblove and Leslie Curran became members of the Forum’s Governing Committee, while Joseph Fittante began his second term on the Committee.

Forum Chair Ron Gardner of Dady & Gardner appointed two Governing Committee members to new officer positions. Ms. Curran will serve as Diversity Officer and Kathy Kotel will be Membership Officer.

The new Governing Committee members will serve with the current officers: Kerry Bundy (Marketing Officer), Harris Chernow (Finance Officer), Deb Coldwell (Publications Officer), Mr. Fittante (Program Officer), Karen Satterlee (Women’s Caucus Liaison), and Leslie Smith (Technology Officer).

John Pratt is the new chair of the International Franchise and Distribution Division. Kerry Olson is another new member of the Divison. Lee Plave will serve a second term. Brian Balconi will serve as chair of the Corporate Counsel Division. Heather Bias has joined the Division and Andra Terrell will serve a second term. Roland Baggett III is a new member of the Litigation and Alternative Dispute Resolution Division.

Max Schott is the new editor in chief of the Franchise Lawyer newsletter. Beatta Krakus has joined the editorial board.

Focus on Franchising

This posting was written by Pete Reap, Editor of CCH Business Franchise Guide, and John W. Arden.

News and notes on franchising and distribution topics:

□ Manitoba has proposed a franchise disclosure and relationship statute that would require franchisors to make presale disclosures to prospective franchisees, prohibit presale misrepresentations, and impose a duty of good faith and fair dealing on parties to franchise agreements. The proposal would also guarantee franchisees the right to associate and a right of rescission. As with franchise legislation enacted by Prince Edward Island and New Brunswick within the past five years, the Manitoba bill is based on the Uniform Franchises Act (CCH Business Franchise Guide ¶7021), a model law that was adopted by the Uniform Law Conference of Canada. Text of the Manitoba proposal appears at CCH Business Franchise Guide ¶14,378.


□ The ABA Forum on Franchising has announced the program for its 33rd annual Forum, to be held October 13-15, 2010 at the Hotel Del Coronado, San Diego, Calfornia. “Franchising: Some Like It Hot” will feature two half-day intensive workshops on Wednesday, October 13, followed by the two-day regular program, consisting of two plenary sessions and 24 workshops. The plenary sessions are “Strategic and Tactical Decision- Making: What Do Your Peers Think of Your Decisions” (presented by Kerry L. Bundy, Dr. Melissa M. Gomez, Harris J. Chernow, and Joesph Schumacher) and the Annual Franchise and Distribution Law Developments program (presented by Bethany L. Appleby and William K. Whitner). Co-Chairs of the meeting are Deb Coldwell and Kathy Kotel. Further information—and the meeting brochure—appear here at the Forum on Franchising website.

□ Provisions of South Africa’s Consumer Protection Act (Act No. 68 of 2008) that apply to franchise agreements came into effect on April 24, 2010. The Act requires franchise agreements to be in writing and signed by or on behalf of the franchisee. The agreement must include any prescribed information and comply with the Act’s plain language requirements. Regulations detailing franchise disclosure requirements are expected to be promulgated in the near future, but are not in the Act itself. The Act authorizes franchisees to cancel a franchise agreement without cost or penalty within ten business days after the agreement’s execution by the provision of written notice to the franchisor. Full text of the Consumer Protection Act appears at CCH Business Franchise Guide ¶7245. According to an alert posted by DLA Piper, “there has been some confusion about the scope of South Africa’s Consumer Protection Act (whether the whole Act or only parts of the Act would apply to franchising) . . . It is important to keep in mind that the Act, while imposing some consumer protection-type requirements in franchise transactions in some places (e.g., the right to be treated equally), specifically excludes franchise transactions from other provisions that apply to consumer transactions (e.g., the right with respect to the goods or services supplied).” Alert authors Philip F. Zeidman and Tao Xu advise franchisors to “carefully examine the Act and consult with counsel to determine which provisions are applicable to a franchise transaction.”

Focus on Franchising

This posting was written by John W. Arden.

News and notes on franchising and distribution topics:

□ The U.S. Supreme Court has scheduled oral argument on January 19, 2010, on Mac’s Shell Service Inc. v. Shell Oil Products Co., a case involving constructive nonrenewal claims brought by Shell gasoline station operators under the Petroleum Marketing Practices Act (PMPA). The U.S. Court of Appeals in Boston (CCH Business Franchise ¶13,890), held that the PMPA did not support a claims for constructive nonrenewal where a franchisee had signed and continued to operate under the complained of renewal agreement. On June 15, 2009, the Supreme Court granted the petitions of the franchisees and Shell (see June 16, 2009 posting at Trade Regulation Talk). The franchisees asked the Court to consider “the scope of the protections afforded by the PMPA to franchisees who face termination or nonrenewal of their franchise agreements unless they accept onerous contract terms.’’ They alleged that there was a split among the circuits “over whether a franchisor can lawfully present its franchisees with the Hobson’s choice of accepting unlawful contract terms or risking their livelihoods on a chance that a court will grant a preliminary injunction.” The petitions are Mac's Shell Service, Inc. v. Shell Oil Products Co., Dkt. 08-240, and Shell Oil Products Co. v. Mac's Shell Service, Inc., Dkt. 08-372.

□ The ABA Forum on Franchising is presenting a teleconference and live audio webcast of “Mediating Franchise Disputes,” a CLE program presented from 1 p.m. to 2:30 p.m. EST on Tuesday, December 3, 2009. This program— “one of the best programs presented at the 32nd Annual Forum on Franchising”—will cover the benefits and strategies used in mediations, as well as how to effectively draft mediation clauses. Moderated by Earsa Jackson of Strassburger & Price, the program will feature Michael K. Lewis of JAMS, Peter R. Silverman of Shumaker, Loop & Kendrick, and Peter J. Klarfeld of Grey Plant Mooty. Further information appears here on the ABA website.

□ The plenary session on Annual Franchise and Distribution Law Developments is always a highlight of the annual meeting of the ABA Forum on Franchising. This year’s plenary session—presented on October 16 by Joel R. Buckberg and Jon P. Christiansen—was no different. Each year since 2002, the presentation has been accompanied by a soft-cover bound volume containing more details of the developments and trends of the year. The introduction to this year’s book included a particularly interesting list of themes and trends from the reporting period of August 1, 2008 through July 31, 2009:

■ The extraordinary impact of automobile industry contraction, manufacturer bankruptcy, brand terminations, and dealer network shrinkage produced a sizable number of challenges to auto industry practices and efforts to restructure.

■ Franchisee challenges to franchise selling practices using deceptive practice statutes gained traction with appellate courts and demonstrated desperation in selling tactics, even for experienced franchisors.

■ Arbitration provisions continued to face uncertain enforcement, but challenges to arbitration awards were unsuccessful for the most part.

■ The U. S. Court of Appeals for the Ninth Circuit and its District Courts, the Federal Trade Commission and the California Department of Corporations again ignored each other’s policies on negotiation of franchise agreements and fostered their contradictory policy approaches to franchise empowerment.

■ There was no meaningful harmonization of the revised FTC Franchise Rule and state franchise laws, regulations, exemptions, and exclusions.

■ Damages for early termination of franchise relationships became less certain of collection, particularly where the franchisee’s history of unprofitable operation made its viability for the remainder of the franchise term speculative.

■ Bankruptcy court decisions highlighted the unfortunate risks that reward entrepreneurship with asset liquidation when a franchise, a franchisee and the franchisee’s financing are mismatched.

■ In-term non-competition covenants came under attack in the Ninth Circuit, applying California law, and in Georgia, where the state’s constitution supplied the firepower, in both cases to curtail the scope of these restrictions substantially.

■ Courts once again wrestled with legal principles underlying voluntary choice of law, fundamental public policy identification for conflict of laws purposes, and the applicability of state franchise statutes, producing some inconsistency and reduced predictability in case outcomes.

Further information about the ABA Forum on Franchising and its publications appears here.

Despite Lower Turnout, ABA Forum on Franchising Is in Good Shape: Chair

This posting was written by John W. Arden.

In spite of sharply lower attendance at the ABA Forum on Franchising’s 32nd annual meeting, the “State of the Forum” is still “very, very good,” according to an October 16 address by Ronald Gardner, new chair of the group.

Attendance at last week’s annual meeting in Toronto was down by nearly 200 from last year’s near-record number—from 836 to 650. Nevertheless, the turnout was better than expected in view of overall economic conditions, said Gardner, managing partner of Dady and Garner in Minneapolis.

Other indicators are all positive, Gardner noted. Membership retention is at or above other ABA units. The Forum continues to be on solid financial footing. And the group has been able to lock in annual meeting facilities at favorable rates through 2013.

In Forum business, the group voted unanimously to amend its bylaws to expand the size of the governing committee from nine to 12 at-large members.

Three nominees were elected unanimously to serve terms on the governing committee. Serving new terms from 2010 through 2013 will be Leslie Curran of Plave Koch PLC in Reston, Virginia; Joseph Fittante of Larkin Hoffman in Minneapolis; and Michael Joblove of Genovese Joblove & Battista in Miami.

The Forum was revisiting the location of its 1989 meeting—the Westin Harbour Castle Hotel in Toronto.

Highlights of the meeting included a plenary session on “Engineering Healthy Franchise Relationships,” led by franchise relationship expert Greg Nathan, and the Annual Franchise and Distribution Developments session, presented by Joel R. Buckberg of Baker Donelson Bearman Caldwell & Berkowitz in Nashville and Jon P. Christiansen of Foley & Lardner LLP in Milwaukee. The annual reception and dinner was held at the Royal Ontario Museum.

Program co-chairs were Kerry Bundy of Faegre & Benson LLP in Minneapolis and Larry Weinberg of Cassels Brock & Blackwell LLP in Toronto.

The 2010 annual meeting is scheduled for October 13-15 at The Hotel Del Coronado in Coronado, California. The program chairs will be Deborah Coldwell of Haynes and Boone LLP in Dallas and Kathy Kotel of Carlson Restaurants Worldwide of Carrollton, Texas.

Baer Receives First Rudnick Award for Contributions to Franchise Law

This posting was written by John W. Arden.

The ABA Forum on Franchising on October 15 presented the inaugural Lewis G. Rudnick Award to John R. F. Baer in recognition of his contributions to the development of the Forum and franchise law as a discipline. Baer is a partner in the Chicago office of Sonnenschein Nath & Rosenthal, LLP.

The “lifetime achievement award” was created in remembrance of Lewis Rudnick, who died on January 24, 2009, at age 73. Recognized by the Forum as “one of the true giants of the franchise bar,” Rudnick was a founder of the Forum and its second chair (1981-1983). He helped establish the Franchise Law Journal, the Forum’s quarterly publication. As senior partner of Rudnick & Wolfe (currently DLA Piper), Rudnick trained several generations of some of America’s leading franchise lawyers.

“Most important, Lew was a kind man and consummate gentleman, who treated everyone with respect and demonstrated the personal qualities to which all lawyers should aspire,” said Edward Wood Dunham, immediate past chair of the Forum, in announcing the creation of the award.

The Rudnick Award is intended to honor members of the Forum who, over the course of distinguished careers as franchise lawyers, have made substantial contributions to the development of the Forum and to franchise law as a discipline, while comporting themselves in accordance with Lew Rudnick's high standards of professionalism, decency, and collegiality.

In presenting the first Rudnick Award, new Forum Chair Ron Gardner cited Baer’s thousands of hours of work for the Forum as a frequent speaker, author of more than a dozen Franchise Law Journal articles, editor of the Franchise Lawyer newsletter, associate editor of the Franchise Law Journal, member of the governing committee, and publications officer.

He is the chair of the Illinois Attorney General’s Franchise Advisory Board and editor of the CCH Sales Representative Law Guide, Gardner said. In addition, Baer is currently Vice Chair of the International Franchising Committee of the International Bar Association’s International Sales, Franchising and Product Law Section and formerly vice president of the Franchising Committee of Union Internationale des Avocats.

Baer has mentored many leading franchise lawyers during his long career in the field—and did all these things “with a smile,” Gardner said.

The presentation occurred during the opening session of the main program of the 32nd annual meeting of the Forum on Franchising, held in Toronto on October 14-16.

Additional Awards

Gardner referred to three additional annual awards, intended to recognize franchise lawyers at earlier stages in their careers, to encourage young and/or diverse practitioners to become and remain involved in the Forum, and to help them identify pathways to Forum leadership.

Those three awards are: (1) Chair's Award for Substantial Written Work or Presentation; (2) Chair's Future Leader Award; and (3) Chair's Explorers Award.

These awards will be presented for the first time at next year’s annual meeting, to be held October 13-15, 2009, at The Hotel Del Coronado, Coronado, California.