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What legal issues does franchising face as it approaches 2000?To find out, we asked those with their fingers on the pulse of theindustry: franchise attorneys Rochelle B. Spandorf, a partner withLos Angeles law firm Foley & Lardner, and Lewis G. Rudnick, apartner with Chicago franchise law firm Rudnick & Wolfe, whogave us the lowdown on the issues.
- Web encroachment.When you begin retailing over theInternet, you may find yourself encroaching on someone else'sexclusive territory, says Spandorf. "[Franchisors] may need tohave franchisees who have exclusive territorial protection sign anamendment to their contracts," she says, "and it maycause some difficulty in franchise relationships."
- New market encroachment."A few cases have croppedup that raise questions about whether the franchisee has a claimfor bad faith when he or she feels a franchisor has put a new unittoo close to an existing unit or when it sells in anotherdistribution channel [such as supermarkets]," says Rudnick."The system expansion conflict issue will probably be resolvedby developing procedures to avoid conflict, rather than throughlitigation."
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