W6 The Favorite Child: Legal and Practical Implications of Treating Franchisees Differently

Most franchise agreements explicitly disclaim the franchisor’s obligation to treat individual franchisees the same or expressly reserve the franchisor’s right to enforce the agreement terms selectively. Franchisors may consider treating some franchisees differently than others, including when negotiating franchise agreements; implementing new programs or system changes; accommodating franchisees in need of assistance during the term; seeking to prevent the loss of a franchise unit; policing system standards; and enforcing the noncompetition covenant. Treating franchisees differently, however, can have significant consequences. And franchisees often cite unequal treatment as a defense to franchisor claims or to support their own claims against franchisors. This workshop will examine the practical and legal implications of franchisors applying the terms of the franchise agreement or brand standards in different ways. It will provide an overview of states that prohibit differential treatment of franchisees, what practices could constitute differential treatment, pricing issues that might implicate the Robinson-Patman Act, when differential treatment is warranted, whether franchisees are similarly situated, and how franchisors and franchisees use unequal treatment arguments in litigation. The panel will also consider discovery issues in litigation involving disparate treatment.

Other Speakers:

Mackenzie Dimitri, Einbinder & Dunn LLP

For more information, view the agenda.