A Timbit of Trouble

570 News in Toronto reports that Tim Horton’s franchise owners have launched a near $2-billion lawsuit claiming lost profits since the iconic Canadian company switched from fresh-baked to frozen donuts. The $1.95-billion suit is scheduled to go to court in November and it has even divided franchisees, as a large group of store owners is trying to stop a smaller group from following through on the lawsuit.

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Support the Arbitration Fairness Act

Binding arbitration clauses are increasingly being inserted by businesses when entering into contacts with other parties. These clauses, which often provide businesses with an advantage and go unnoticed by the signer, drastically limit the legal options available to the signing party. The Arbitration Fairness Act bans mandatory binding arbitration clauses in consumer and employment contracts, including franchise agreements. Specifically acknowledging the disparate economic power between the parties, the bill invalidates the enforceability of pre-dispute arbitration agreements in franchise disputes

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Krispy Kreme Wins Trademark Claims Against Franchisee

Mark Hamblett reports in the New York Law Journal and published at Law.com that the franchisor Krispy Kreme Doughnut Corp. has won an injunction blocking a delinquent franchisee from operating in New York’s Pennsylvania Station and another location. A federal judge granted the preliminary injunction to the doughnut maker on the grounds that franchisee Satellite Donuts was behind on its obligations under its agreements with Krispy Kreme and is in violation of the Lanham Act.

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Franchisor Retaliation: A thing of the past?

The American Heritage Dictionary defines retaliate as, “To return like for like, especially evil for evil.” In life we are taught that one good turn deserves another. In franchising, many believe there is evil lurking when a franchisor decides it does not agree with the words or actions of one of its franchisees. This is especially so when the actions of the franchisor are based on that franchisee’s membership in or leadership of a franchisee association.

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Judge Grants Fraud Trial Against Dunkin’, Kainos

Janet Sparks writes at Blue MauMau that after Patrick LaFontaine, professional hockey player and inductee in the Hockey Hall of Fame, filed a lawsuit against Dunkin’ Brands and the principals of its bankrupted franchisee Kainos Partners Holding Company, a Nassau judge ruled last week that fraud claims can now move forward against the defendants.

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Court: Burger King Can Set Prices

Burger King Holdings Inc. won dismissal of part of a lawsuit brought by franchisees over the $1 double cheeseburger promotion, but a Miami court will hear arguments on whether the company acted inappropriately in implementing the deal.

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How Franchisees Fire Franchisor CEOs and Boards

Don Sniegowski writes at BlueMauMau that Experts say that well organized franchisees can make profound changes in a franchisor’s behavior. Some have even been able to fire wayward CEOs, replace a franchisor’s board of directors, and spearhead a new strategy that lifts store profits and the brand.

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