Franchise and Distribution

Taft’s Franchise and Distribution attorneys understand the franchise industry and offer a broad range of services including transactional, regulatory, intellectual property, and litigation matters. We work with franchisors, franchisees, master franchisees, manufacturers, distributors, dealers, and industry associations to achieve both short and long-term success and prepare for growth.

Transactional

Our attorneys work with clients to negotiate various agreements, including franchise agreements, development rights agreements, cooperative advertising agreements, market test agreements, consent to assignment agreements, supply agreements, distribution agreements, alternative channel (including e-commerce) agreements, termination agreements, and settlement agreements.

We have handled numerous sales and acquisitions of franchise and distribution businesses involving:

• Structuring the transaction
• Tax advice
• Negotiating the acquisition agreements
• Environmental issues
• Employment issues
• Hart-Scott-Rodino filings
• Post-closing issues

Regulatory

We also advise franchisors on compliance with FTC and state franchise disclosure/registration laws, relationship/termination laws, and business opportunity laws. Our attorneys provide counsel on structuring distribution to minimize the impact of such laws.

Intellectual Property

Taft assists franchisors in preparing franchise disclosure documents, franchise agreements, license agreements, and protecting trademarks, copyrights, trade class, and patents. We draw upon the experience of Taft’s more than 90 intellectual property attorneys, including more than 40 registered patent attorneys.

Litigation

Taft litigators have represented clients throughout the nation in federal and state courts on issues of importance to franchisors, franchisees, manufacturers, and distributors. We also have experience in arbitration, mediation, and other alternative dispute resolution procedures. Taft has both pursued and defended breach of contract actions, including actions related to:

• Exclusive territories
• Encroachment
• Non-competition agreements
• Rights to transfer the franchise
• Termination rights
• Franchisor and franchisee performance

We have litigated good faith and fair dealing claims and claims of implied or quasi contract dealing with changing methods of distribution, rights to new products, franchisor pricing of its products, and other aspects of the franchise and distribution relationship.

Our attorneys have also litigated as to the consequences of franchisors acquiring other franchise systems. Taft has litigated statutory and tort franchise issues, including compliance with state registration/disclosure laws, business opportunity laws, relationship/termination laws, and claims of fraud, tortious interference, infringement, and other conduct.

Taft’s franchise lawyers have also litigated cases arising under federal and state antitrust and unfair trade laws involving franchise/distribution systems, vertical restraints, tying arrangements, price discrimination, and deceptive or unfair trade practices.

Taft is a member of the International Franchise Association, and our attorneys are frequent speakers at seminars and author numerous articles in national franchise publications. Our Detroit office has created the Michigan Franchisor Network, a group of approximately 25 franchise companies that meet quarterly to discuss common issues in franchising.

• Drafted and implemented new dealer agreements for manufacturer of hydraulic excavators used in construction industry.
• Assisted manufacturer of medical equipment with consolidation of distribution network.
• Counseled manufacturer of composite construction materials in termination of exclusive distributor and establishing new distribution system.
• Represented a group of 70+ convenience and gas store franchisees in bankruptcy proceedings of their franchisor, and purchase of their franchise agreements, leases and franchisor’s trademarks in bankruptcy auction.
• Defended bearing manufacturer against claims by distributor for wrongful termination of distributorship agreement, violation of the Wisconsin Fair Dealership Act, and tortious interference with business relationships.
• Represented beverage bottler and distributor in litigation with major national beverage brand company involving claims and counterclaims for breach of distribution agreements and related torts.
• Represent franchisee association in negotiating distribution agreements for new products and market channels, including e-commerce.