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Register Now for
the 4th Annual Franchisee Legal Symposium and Save $$$
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We're already preparing for the AFA's fourth Franchisee Legal Symposium
April 26-27, 2001 in Philadelphia, PA - and franchisees who register on or before December 8, 2000 will receive $10.00 off the registration fee.
The Franchisee Legal Symposium is your opportunity to meet and mingle with some of the best franchisee
lawyers in the country. Besides hearing their formal presentations, you'll be able to meet one-on-one and
question them regarding your specific issues. The Franchisee Legal Symposium is also a great opportunity to network
with franchisees from other chains to learn how they are working to improve relations with their franchisors.
Here are just a few of the topics that we'll cover: |
What Past Attendees Have to Say
" Well-spent money. I wish I received this much out of a
9-year relationship with the
franchisor."
Robert Dille, Steak Escape
" Beyond my expectations. Don't operate a franchise
without this expertise and knowledge."
Chip Winand, The Shepard's Guide
" Excellent program, particularly to help us grow our new
owners' association."
John Hughes, Kwik Kopy |
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 Why Do Franchisors Pick on
Good Franchisees?
Forming an Independent
Franchisee Association.
Assessing How Franchisees Have
Fared in State Courts and Legislatures.
Arbitration and Other Ways to
Deal With Your Franchisor Without Resorting to Litigation.
Exiting the System-Techniques
to Leave Amicably and Without Hostility.
Franchise Agreement Terms-What
to Keep Out-What to Get In.
Making QSCs and QARs Work For
You-How Franchisors Use Operational Reviews and How Franchisees Can Avoid
Problems Later.
Problematic
Relations-Franchising and the Law of Incomplete Contracts.
The Ten Most Oppressive
Clauses in Franchise Agreements.
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Legal Brief
FRANCHISOR PROHIBITED FROM COMPETING WITH FRANCHISEES IN E-COMMERCE
In what many believe is the first decision addressing the issue of whether
franchisors may compete with their franchisees in e-commerce, a panel of
arbitrators has enjoined a franchisor, Drug Emporium and its
subsidiary, DrugEmporium.com from selling over the Internet to customers
located in the territories in which franchisees have been given the
exclusive right to operate Drug Emporium stores.
In deciding that a preliminary injunction should be issued, the arbitrators
considered the following question-"whether a virtual drug store is a
drug store for purposes of a franchise agreement?"
In finding that the franchisees demonstrated the requisite likelihood of
ultimately proving that Drug Emporium's internet sales breached its
commitment to provide its franchisees the exclusive right
to conduct the business of drug stores in designated territories, the
arbitrators concluded:
It is not for this panel to divine whether a virtual reality is real or
whether it is a phantom. We will take Respondents at their word. Respondents
have marketed DE.com to be a "drugstore" in its filings to
the SEC. We also infer from the Respondents' conduct that [they] honored the
Claimants' territories until now ? including the offer of compensation
during the test period for DE.com ? that the parties' reasonable expectation
was that the Claimants would not be forced to compete with drug store sales
by Respondents. This inference is bolstered by the failure of the franchise
agreements to permit the Respondents to operate drug stores within the
territory absent a breach by the franchisees.
The arbitrators also found that the franchisees' proof as to how Drug
Emporium has been operating its website, including advertising this new
website as "Your neighborhood pharmacy for twenty years,"
establishes a likelihood that the franchisees will ultimately prevail in
proving dilution of the licenses
the franchisees hold to use the Drug Emporium trademark in their
territories.
Michael Dady of Dady & Garner, PA, an AFA Affiliate Member represented
the franchisees in this matter. Mr. Dady commented, "When franchisees
are given exclusive territories to conduct their store operations, and pay
substantial royalties to obtain support from their franchisors, they do not
expect
to have to compete with their franchisors. This decision enforces the
reasonable expectation of our franchisee clients - no competition from their
franchisor."
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Leadership Summit
On April 25, 2001, franchisee leaders from around the country will meet to
discuss issues and exchange ideas on the effective operation of their
independent franchisee associations. If you are a leader of an independent
franchisee association or are thinking about forming an independent
association, you'll want to join us for the Franchisee Leadership Summit.
Franchisees thinking about forming an association will be able to attend the
Summit as observers to learn from others who've already been in the start-up
stage. [The Leadership Summit is open to franchisees and members of the AFA
only and is closed to the press.]
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Mission of the AFA
1. To represent franchisees in all industries in the development of
franchising;
2. To educate franchisees, the government, the business community
and the public as to the needs and requirements of franchisees;
3. To improve and promote the business conditions for franchising
generally; and
4. To protect and enhance the economic investment of franchisees. |
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AFA PAC
Personal Contribution Form
 YES,
I want to fund candidates who support issues important to small business franchisees. I
understand that my contribution is not tax deductible and that a corporate check cannot be
accepted. You may proceed to our on-line secured contribution form or print and fax/mail
our form.
Print to Fax/Mail Form
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In This Issue of AFA's Blast Fax 
The
American Franchisee Association