Franchise Litigation

We have significant experience in franchise litigation in a number of industries and have tried franchise dispute cases to verdict.

The following are examples of franchise litigation handled by the Firm’s attorneys:

• Michael L. Kirby represented a supplier of industrial marine equipment in a multi-million dollar claim against the equipment manufacturer. The Plaintiff argued that the manufacturer breached the parties’ distribution agreement. The Plaintiff also claimed that the manufacturer interfered with a relationship between the Plaintiff and its largest purchaser.  Kirby obtained jury verdicts of $1.6 million in compensatory damages and $6 million in punitive damages. The case settled after appeal.
• Michael L. Kirby represented franchisees of fast food outlets against claims that the franchisor breached fiduciary duties, made false and negligent misrepresentations, and employed unfair business practices with respect to sublicense agreements and the operation of the restaurants. The Plaintiffs claimed that the franchisor failed to fulfill its promise to provide expert support in the opening, advertising, and ongoing operations of the stores. Plaintiffs also argued that the franchisor misrepresented the success rate of new restaurants and negligently handled sublicense agreements and investment strategies. As a result, Plaintiffs claimed that they over invested in substantial services and the restaurants were doomed to fail from the outset of their venture with the franchisor. The parties settled the case in a mutually agreeable manner subject to a confidentiality agreement.
• The Firm represented franchisees of another national fast food chain on claims that the franchisor failed to meet its franchise agreement obligations. Specifically, the Plaintiffs claimed that the franchisor did not fulfill its commitment to provide support to restaurants in new markets. The case settled for $5.5 million.
• Michael L. Kirby defended an owner and franchisor of check cashing offices against a class action suit. The Defendant represented the largest chain in the $55 billion payday loan industry. Plaintiffs claimed that franchisees violated California statutes enacted to regulate check cashing and deferred deposit transactions. The Plaintiffs sought both treble and punitive damages against Defendant and the franchisees. Defendant raised multiple defenses, including control issues related to Defendant’s liability for any illegal acts committed by the franchisees under the franchise agreement.