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24 Franchise L.J. 1 (2004-2005)

handle is hein.journals/fchlj24 and id is 1 raw text is: URcANHISE LAW JOUnRNAL QT I AMERICAN QUARTERLY JOURNAL OF THE FORUM ON FRANCHISING Letter to the Editor: Franchise Lawyers Should Practice Justice ...................... 2 L. SETH STADFELD S ome agreed with Editor-in-Chief William L. Killion's editorial in the spring 2004 issue in which he discussed the role played by franchisors trial lawyers. Others did not. In an impassioned response, reader Seth Stadfeld examines the impact of Killion's approach on three situations-post- term noncompete clauses, changing of system standards, and vicarious liability claims-and concludes that fran- chisor are not always right. Editorial: One Person's Sense of justice Is Another's Sense of Injustice .................. 3 WILLIAM L. KILLION ditor-in-Chief Killion uses Seth Stadfeld's letter as the basis for an analysis of social capital, the role of the Forum, and franchise litigation. He postulates that a person- al sense of justice should be left at the courthouse steps and that strict contract interpretation will ultimately result in a more equitable decision for everyone involved. Retaining and Improving Brand Equity by Enforcing System Standards ................... 10 EDWARD WOOD DUNHAM, JOSEPH SCHUMACHER, AND G. ADAM SCHWEICKERT III nforcing system standards is necessary to protect a Efranchisor's marks and simply makes good business sense. The authors discuss the Lanham Act and state trademark statutes to describe why a compliance program is necessary to keep system standards up to par. They also suggest how to achieve franchisees' commitment. The keys to success, all of which are discussed in detail, are check, coach, check, and enforce. Contractual Limitations of Action Periods in Franchise Agreements ...................... 18 SANDY T. TUCKER A contractual limitation of action provision in a franchise agreement should never be routine. Careful drafting, according to Sandy Tucker, includes evaluating (1) whether to include such a provision in the first place; (2) what is to be accomplished through the provision; (3) how to craft the provision to meet these objectives; and (4) the impact of law on the enforceability of the clause. BAR ASSOCIATION VOLUME 24, NUMBER I • SUMMER 2004 Utilizing the Doctrine of Prior Material Breach to End a Franchise Relationship ....... 23 W. MICHAEL GARNER AND SARAH A. JOHNSTON P rior material breach has been defined as the breach of a fundamental obligation of an agreement, such that the failure to perform that obligation defeats the essential pur- pose of the contract and excuses the nonbreaching party from further performance. Simple to state and difficult to apply to franchise agreements. The authors include a listing of the top five reasons for material breaches for both franchisors and franchisees. The Operations Manual-Essential to Success ... 31 SCOTT G. MCLESTER, SUSAN H. MORTON, AND KAREN B. SATTERLEE A franchisor's operations manual is, or should be, the Bible of the franchise relationship. Not only does the opera- tions manual embody and convey to franchisees the existing standards and requirements of the franchise system, it also serves as the primary vehicle for system change. The authors describe some of the legal problems that operations manuals have created and suggest how a franchisor can make the most of its operations manual while avoiding legal pitfalls. Franchising (& Distribution) Currents ........ 42 MICHAEL J. LOCKERBY. EDITOR: CHRISTOPHER P. BUSSERT, DIANE GREEN-KELLY, AND COURTLAND L. REICHMAN summary of recent court cases affecting franchising and distribution law.

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