When litigation does arise, what are the more common areas for dispute that arise during the franchisee-franchisor relationship?
A. Generally, a dispute between a franchisee and a franchisor involves one of eight common issues. The eight issues relate to (1) termination of the franchisee, (2) enforcement of the post-term obligations, (3) issues of vicarious liability, (4) statutory compliance issues, (5) fraudulent practices, (6) intellectual property matters, (7) territorial encroachment and (8) general contract disputes. Many cases involve matters arising after a franchise is terminated. Along with terminating the franchisee’s relationship with the franchisor, it is vital to the health of the franchise system that the franchisee complies with its post-term obligations, including any non-competition and non-disclosure agreements. Vicarious liability is a legal term that in this context is used to describe where a claim against a franchisor is based on acts or omissions by the franchisee. Typically, a well-drafted franchise agreement would insulate franchisors from vicarious liability claims. Also common areas f
