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Posts in Franchise Agreements.
By Franchising & Distribution Group on March 28, 2013 at 9:47 AM

Patrick Jones and Beata Krakus recently published an article discussing how franchisor's protect themselves with franchise agreements and how these very agreements potentially are not worth the paper they are written on. Read the article to learn more about why the agreements are unenforceable and the possible scenarios for the franchisor when a franchisee files for bankruptcy.

Read the article.

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By Daniel Garner on January 11, 2013 at 6:27 PM

Franchisors often include a “no reliance” clause in their franchise agreements, in which the franchisees acknowledge that they have not relied on any information or representation not expressly stated within the franchise agreement itself. The intent of such clauses is to help protect against a claim based on alleged oral or written representations made outside of the franchise agreement. Although several federal courts have found that such “no reliance” clauses preclude franchisees from proving fraudulent misrepresentation cases, many state courts have been hesitant to bar fraud claims based on such clauses.

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By Abby Risner on October 10, 2012 at 5:20 PM

On September 7, the United States Court of Appeals for the Eighth Circuit refused to lower the high standard for a franchise agreement to be considered perpetual under Missouri law.

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By Beata Krakus on September 4, 2012 at 6:28 PM

Franchisors often complain about the complexity of franchise laws and wish to structure distribution systems in a way to avoid those laws. Anybody who manages to do that, however, should be aware of the federal and state business opportunity laws that may apply to such systems. To generalize, a business opportunity is an agreement under which the seller/franchisor provides the buyer/franchisee with goods or services to help start a business and makes some representations about the money the buyer can make, that the seller will reimburse the buyer for losses, or provide a sales or marketing plan. Franchisors can usually escape applicability of the business opportunity law because exemptions for franchises that comply with the FTC Franchise Rule, but for those systems that structure around that rule business opportunity laws may become an issue.

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