Monthly Archives: June 2019
Auto Franchise Dealer Termination Claim Permitted to Proceed
Jun 9, 2019 - Judge’s Distribution and Franchise Rulings from the Front Lines by Jeffrey M. Goldstein |Auto Franchise Dealer Termination Claim Permitted to Proceed By: Jeffrey M. Goldstein Judicial Update — Nissan N. Am., Inc. v. Tillman, No. 2018-CC-00462-SCT, 2019 Miss. LEXIS 220 (June 6, 2019) In a recent case, the Supreme Court of Mississippi ruled that in an auto franchise dealer termination dispute between an automobile dealer and an automobile manufacturer the dealership had timely filed a complaint under the Mississippi Dealership Act after the auto franchisee received the auto manufacturer’s letter providing notice that the dealership was being terminated. The MDA has two provisions applicable to the dispute: first, the MDA statute requires an auto manufacturer seeking to terminate a dealer agreement to provide a notice of termination to is vehicle dealer at least sixty days before the effective date of the termination; and, second, another statutory provision provides a dealer an opportunity to challenge a notice of termination by filing a verified complaint with the Mississippi Motor Vehicle Commission “within the sixty-day notice period.” In this case, because the parties’ franchise agreement required ninety days’ notice before a termination, the franchisor Nissan served the 90-day notice on November 23, 2016. In turn, the franchisee car dealership filed its complaint on February 17, 2017; although the dealership’s filing was within the 90 days period it was not within the initial 60 days period following service of the notice. The Motor Vehicles Board, in dismissing the franchisee’s complaint as untimely, framed the issue as: “does the statutory language ‘within the sixty-day notice period’ refer to the […]
Considering a Franchise? Don’t Overlook These Provisions of the FDD and Franchise Agreement
Jun 7, 2019 - Blog by Goldstein Law Firm |Before you buy a franchise, the franchisor is legally required to provide you with a copy of its Franchise Disclosure Document (FDD) and franchise agreement. Federal regulations require franchisors to deliver these documents at least 14 calendar days prior to entering into a franchise relationship. This “cooling off” period is designed to give prospective franchisees sufficient time to weight their options without being pressured by the franchisor, as well as to review the FDD and franchise agreement in detail. When reviewing the FDD, most prospective franchisees hit the highlights: the Initial Franchise Fee, the royalty rate, the estimated initial investment and maybe the description of the protected territory. Few digest the FDD in its entirety, and fewer still take the time to wade through the dense legalese of the franchise agreement. 5 Key Issues to Review in the FDD and Franchise Agreement But, when buying a franchise, you need to gather as much information as possible, and you need to make sure you have a clear understanding of your legal rights and responsibilities. You also need to make an informed decision about negotiating certain provisions of the franchise agreement. If you overlook these provisions of the FDD and franchise agreement, among others, you may find yourself facing unexpected (and unhappy) surprises down the line: Franchisor Personnel Experience – Do the franchisor’s key personnel have experience running the type of business you will operate as a franchisee? Do they also have significant experience working for franchisors? Both of these are important, […]