Turf WarsA landmark court ruling could have new implications in franchise relationships.
ByJanean Chun•
Opinions expressed by Entrepreneur contributors are their own.
For years (though it seems like forever) encroachment has reigned as franchisees' single most important concern. And yet a recent court ruling may have finally prompted the industry to come up with a definitive solution and at last put an end to the scuffles.
The ruling by the 9th U.S. Circuit Court of Appeals found that Mexican-restaurant chain Naugles Inc. breached the good faith and fair dealing clause in its franchise agreement when it opened a restaurant 1.4 miles away from a Long Beach, California, location owned by franchisee Vylene Enterprises Inc., which eventually went out of business.
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