Arrangements That Restrict Franchisees’ Rights to Offer Competitive Products and Pricing May Violate Federal Antitrust Laws

The Sherman Act is a federal statute that is intended to protect consumers, franchisees, dealers and others from anticompetitive business practices in various ways. One of these ways is by preventing powerful market competitors (including franchisors) from engaging in “unilateral refusals to deal” that result in illegal market segmentation, tying arrangements and ultimately higher prices for less-desirable products and services.

As a franchisee, you have no doubt grown accustomed to doing business under a strict (and perhaps seemingly arbitrary, incongruous or simply misguided) set of rules and requirements. However, while franchisors generally have broad rights to establish system standards and institute mandatory supplier arrangements, there are certain circumstances in which even franchisors can go too far. If you believe that your franchisor may be engaging in an illegal unilateral refusal to deal, we encourage you to contact us for a free, confidential consultation.

Franchisee Antitrust Claims for Franchisors’ Unilateral Refusals to Deal

Over the years, franchisees and their attorneys have used the “unilateral refusal to deal” doctrine to challenge franchisors’ anticompetitive activities under a variety of different circumstances. This is a highly-complex area of the law, and one in which many franchisor litigation attorneys are well-versed.

In response to franchisees’ antitrust claims, franchisor attorneys will often present unique and highly-technical arguments attempting to justify their clients’ behavior. To overcome these types of arguments, it takes thorough knowledge of the Sherman Act and its specific application in the franchise context.

Franchise attorney Jeffrey M. Goldstein has more than 30 years of experience representing franchisees in litigation against their franchisors, other franchisees, suppliers and other parties. He has handled numerous cases involving complex antitrust issues, including unilateral refusals to deal. Some examples of unilateral refusals that may constitute violations of the Sherman Act include:

  • Refusing to supply products to a franchisee who will not agree to sell only above a certain price
  • Requiring franchisees to purchase one product (e.g., a muffler) in order to purchase another (e.g., a set of tires)
  • Using territorial restrictions to limit franchisees’ access to certain markets, products and services

However, it is important to note that antitrust cases – including unilateral refusal to deal cases – tend to be highly fact-specific. As a result, the refusals to deal listed above (and others) may or may not support an antitrust claim depending on the specific circumstances at hand. At the Goldstein Law Firm, we can assess whether your franchisor may be engaging in illegal anticompetitive conduct; and, if so, we can help you pursue legal remedies which may include financial compensation.

Contact the Goldstein Law Firm | Franchise Litigation Attorney Representing Franchisees Nationwide

To find out if you may have a claim based upon your franchisor’s unilateral refusal to deal, contact the Goldstein Law Firm for a free, confidential consultation. The Goldstein Law Firm is a national franchise litigation firm that exclusively represents franchisees and dealers. For more information about pursuing a case against your franchisor or another party under the Sherman Act, call 202-293-3947 or contact us online today.

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Goldstein Law Firm, PLLC

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Phone: 202-293-3947
Fax: 202-315-2514

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