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It is common place for there to be disputes between Franchisees and Franchisors. Often times, the dispute involves continued use of trademark licenses without paying royalties, claims of fraud involving financial information, and breach of contract or the franchise agreement. However, there is some measure of protection from the unhappy or disappointed with their purchase of a franchise or a franchise store. The franchisee often claims that the financial ;projections of the past performances of the franchise stores or operators.
There is often disagreement about what financial information was provided by the Franchisor and how much of it is mere puffery, opinion or an accurate reflection of the historical performance of different franchise stores. However, in a recent Ruling the Illinois Appellate Court for the First District provided a finding that allowed Ace Hardware to defeat the claims asserted by Avon Hardware. Avon Hardware asserted that Ace Hardware was liable for providing fraudulent or misleading sales and financial information to Avon Hardware.
Ace Hardware was found to have provided a variety of opinions and financial information to Avon Hardware, but was found to be not liable to Avon Hardware. The primary reason for the First District Court’s dismissal of the common law or statutory fraud was the inability to overcome the language in the parties’ Franchise Agreement cautioning about the financial and sales data and the opinions contained therein. The First District Court dismissal of the fraud claims were based on the Franchisees failure to plead and prove materiality and reasonable reliance on the Financial Sales and Data.
Thus, it is crucial for Franchisees to make sure that they verify sales projections and ensure that the Franchisor is required to provide audited financial and sales data. This will help curtail the risk of being provided unnecessarily inflated financial information and sales data. Moreover, it will help ensure that you do not have Buyer’s remorse. Of course, if you have any concerns or questions, then please contact us at http://www.vrplaw.com
Posted in Commercial Agreements, Corporate Counseling, General Business, General Litigation, IP Publications, Mergers and Acquisitions, Trademark Law Updates
Tagged business attorney, business attorney chicago, business counsel, business disputes, business lawyer, business litigation attorney, business litigation lawyer, business owners, chicago busienss lawyer, chicago business lawyer, chicago corporate lawyer, chicago franchise attorney, chicago franchise lawyer, Chicago Trademark Attorney, corporate lawyer, Franchise agreement, franchise attorney, franchise counsel, franchise lawyer, intellectual property, Intellectual Property Litigation Attorney, trademark attorney, Trademark Attorney Chicago, trademark counsel
One of the most practical ways that a business owner can grow his or her business and make it more attractive to investors is by creating an operations and/or process manual. This provides a method of creating knowledge transfer between the owner, employees, and anyone else that may be working for you. It is also a ready source of trade secrets and training materials for new employees. If you can write down what you know, then you have to spend less time revising it to improve on your processes, training replacement employees, identify potential areas of further research and development to develop additional products or services.
After you have taken the time to create an operations plan you can use it to tweak your business plan and corporate strategy. For example, are there processes that are prone to increase risk of liability, if so, then you can think about creating a subsidiary or another company to use to shield the less risky aspects of your business. Maybe, a general commercial liability or products liability insurance policy will effectively help you manage the risk of liability. The operations manual can be used to train new employees and protect against the risk of losing your employees to your competitors. Maybe, you are growing at a rate that exposes you to federal and state employment statutes, and it makes sense in investing in a good employment manual and human resource training program.
Moreover, once you have written down your operations manual not only can you identify areas of innovation, but also potential areas for developing your intellectual property portfolio. The Operations Manual can be the start of an IP development strategy to help create barriers to entry and increase the value of your business. You can develop not only trade secrets, but patents, trademarks, trade dress, and copyrights. In addition, you can identify customers that are generating a large portion of your revenues and try to cater to their need for your products or services. You can identify the traits of these customers that will allow you to find other similar customers to whom you can pitch your product or services.
These customers may also be good sources for strategic alliances and partnerships or some form long term supply or services agreements. Once, you identify who they are you can also develop product or service bundles and/or add on products or services. However, if you have not created a method of tracking who your customers are, then you cannot scale your business. If you have any concerns or questions about your business or corporate planning, then feel free to contact us.
Posted in Copyright Updates, Corporate Counseling, Cyberlaw Upddates, Employment Law Updates, Entertainment Law Updates, General Business, Patent Law Updates, Trademark Law Updates
Tagged Attracting investors, business lawyer, business litigation attorney, business planning attorney, chicago busienss lawyer, chicago copyrights lawyer, chicago employment lawyer, chicago patent attorney, Chicago Trademark Lawyer, corporate compliance attorney, corporate lawyer, corporate planning attorney, Employment Handbooks, increasing the value of your business, intellectual property lawyer, intellectual property portolios, Operations Manual and trade secrets, risk management, risk mitigation strategies, scaling your business
The common law tort of interference with contractual relationships claim is often ignored in deciding how to respond to a business partner, employee or a competitors’ actions. However, interference with contractual relationship claims stem from the common law tort claims for intentional interference with business relationships. This is a good tool to use when there are no written agreements with employees, business partners, vendors, or customers,…
Another option is interference with prospective economic advantage, which is a great tool to use when you were expecting a business opportunity or profit that was thwarted by a competitor, business partner, employee, vendor or customer. Often times, these business or contractual relationships torts can be utilized in place of or to supplement a written agreement. These business torts are a great way to recover lost profits, sales, or compensatory damages that a business owner or company may have lost due to a dispute with employees, business partners, shareholders, vendors or customers.
In situations, where non-competition agreements are non-existent or found to be unenforceable, business owners may be able to recover the same types of damages by using the: a) interference with contractual relationship; b) intentional interference with business relationship; and c) intentional interference with a prospective economic advantage torts. If you have any concerns or questions relating to how to handle the disruption of your business or operations, then please feel free to contact us.
Posted in Corporate Counseling, Employment Law Publication, Employment Law Updates, General Business, General Litigation, Trial Updates
Tagged business attorney, business counsel, business disputes, business lawyer, business litigation attorney, business litigation counsel, business litigation lawyer, business owners, business torts, commercial business disputes, commercial litigation attorney, commercial litigation counsel, commercial litigation lawyer, corporate attorney, corporate counsel, corporate lawyer, disruption of business, disruption of business relationship, disruption of contractual relationship, employment disputes, non-competition disputes, non-solicitation disputes