What are the rights if you’re faced with termination by the franchisor? Generally speaking, most operators of franchises and dealerships have an expectation that if they do the job, they’re gonna be able to continue so long as they are capability performing. And they had a second expectation that if the franchisor or supplier thinks they aren’t doing the job, they’ll be told what they’re doing wrong, what they need to do to fix it, and will be given a reasonable time to appropriately cure the perceived deficiency. So from our perspective, that’s the way franchises and dealerships should operate, and that’s typical expectation of the business people.

Sometimes the writings are contrary to that, the written agreements in place. They don’t typically say terminable on 30 days notice, but occasionally they do. Even if the writing is bad and it purports to affect or allow the termination unnoticed without cause, statutes are in place for car dealers, in essentially every state, for beer distributors in essentially every state for quick service franchisees in 18 states that say you may not terminate absent good cause and absent notice to deficiency and opportunity to cure. So we need to start with what does the writing say in a termination case, and then look beyond the writing if we need to for other statutes that might come into play.

It could be antitrust statutes as well, either common law principles like good faith and fair dealing, or like the fact that this relationship is magnified by the conduct of the parties to permit termination only for cause, and then we look at the equities as to why we deserve to win, and give hopefully the courts or arbitrators some good legal reason why they can rule in our favor, and hopefully stop that. In my dad’s case, for example, I just say it is the writings that said he could be terminated as a beer distributor in 30 days notice with or without cause.

Our argument was that writing had been modified by the conduct of the party, such that he could really – both parties understood. He could really – and would be terminated only if he didn’t perform after be given notice of perceived deficiencies and opportunity to cure. There was a good case out of New Jersey that we cited that held exactly that, and we relied on that case to get my dad an injunction even though his writing was very bad for him.