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In Walk Good Bahamas, Ltd. v. Alpargatas USA, Inc., the United States District Court for the Central District of California addressed whether a distributor could maintain breach-of-contract and good-faith claims after an express written exclusive distributorship agreement expired by its own terms. The court held that when parties continue to perform under a contractual relationship after expiration, an implied-in-fact contract may arise, especially where the conduct extends beyond mere acceptance of orders to include approval of business plans, receipt of confidential data, and continued representation as an exclusive distributor. The court denied dismissal of the breach-of-contract and breach-of-implied-covenant claims, finding that the distributor plausibly alleged a new agreement through post-expiration conduct. However, the court dismissed with prejudice the distributor’s claims for breach of fiduciary duty, fraudulent inducement, and tortious interference, holding that a standard exclusive distributorship does not create a fiduciary relationship, that alleged concealment of potential breaches does not support fraud, and that a party cannot transmute its own breach into tortious interference with third-party contracts. This decision may underscore the importance of clear post-expiration conduct and contractual language in distributorship relationships and may provide guidance on the boundaries between contract and tort remedies in commercial relationships. Case Identification and Parties This case, Walk Good Bahamas, Ltd. v. Alpargatas USA, Inc., 2026 U.S. Dist. LEXIS 168695, was decided on July 28, 2026, by the United States District Court for the Central District of California, with Judge Josephine L. Staton presiding. The plaintiff was Walk Good Bahamas, Ltd., a company […]

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When franchisees begin searching for litigation counsel, they often assume that all franchise lawyers occupy roughly the same position in the legal marketplace. That assumption is understandable because many firms use similar language, emphasize their franchise experience, and describe themselves as knowledgeable advocates in franchise disputes. Yet beneath those similar marketing messages are dramatically different business models, client relationships, and professional incentives. The distinction matters because the interests that a lawyer advances over the course of a career frequently shape the legal environment in which future franchisees must operate. In reality, franchise litigation lawyers generally fall into the three distinct categories discussed below. Understanding those categories is essential for any franchisee attempting to make an informed decision about legal representation. The differences are not merely academic, nor are they limited to firm size, geography, or years of experience. Rather, they involve a fundamental question about whose interests the lawyer is advancing when important legal issues arise. First, there are the firms that represent franchisees and dealers exclusively. These firms devote their litigation practices to advancing franchisee and dealer interests and do not represent franchisors. Their professional energies, legal arguments, appellate strategies, and long-term objectives are aligned with one side of the franchise relationship. Every significant precedent they help create is developed from the perspective of expanding, protecting, or preserving the rights of franchisees and dealers. There are only two national litigation firms in the country that truthfully represent only franchisees. Second, there are firms that openly represent franchisors. These are […]

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“Semi-passive” franchise ownership has become an increasingly popular goal in recent years. Semi-passive owners, or “executive franchisees,” make high-level decisions but do not personally manage their franchise’s day-to-day operations. While semi-passive franchise ownership offers flexibility and time for other endeavors, pursuing this option requires careful consideration. As a result, prospective franchisees who are considering semi-passive ownership should consult with an experienced franchisee attorney who can help them make informed decisions.

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As a franchisee, your territory is among the most valuable aspects of your franchise. As a result, protecting your territory is extremely important. If your franchisor or another franchisee is encroaching on your protected or exclusive territory, you should consult with an experienced franchise attorney about your legal options promptly.

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Facing a dispute with your franchisor can put you in a difficult position. On the one hand, it is important to stand up for your rights as a franchisee. On the other, you have your relationship with your franchisor to consider, and there are costs involved in taking (or defending against) legal action. With this in mind, it is best to speak with a franchise lawyer sooner rather than later.

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Franchisees who are interested in cashing out must strictly comply with their franchise agreements both before and during the transfer process. Franchise agreements often include several conditions on transfer, including securing the franchisor’s approval, paying a transfer fee, and complying with the franchisor’s right of first refusal.

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While owning a franchise can be profitable, it is debatable that franchise ownership has made “countless Americans rich,” as claimed in a recent article published by The Economist. This also ignores data suggesting that the average single-unit franchise owner earns less than $100,000 annually, and that for new owners, the average is closer to $50,000. Additionally, around one in ten franchises fail completely within the first two years.

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Many experienced franchisees say they wish they had known more about the unique challenges of franchise ownership before moving forward. Not having a clear understanding of the costs involved is a common lament as well. Some also say they expected to take a more hands-off approach than their franchises ultimately required.

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Last month, we published an article outlining seven reasons franchisees should be cautious about using artificial intelligence (AI) when researching franchise opportunities. In that article, franchise attorney Jeffrey M. Goldstein highlighted some of the key pitfalls of using AI for research purposes, particularly when researching anything with significant financial or legal implications (or both).

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You received a franchise termination notice. Maybe it was expected, or maybe it wasn’t—but now you are facing a high-risk situation that you never expected when you signed your franchise agreement. In this situation, what can (and should) you do? Equally important, what should you avoid doing, and what (if anything) can a franchise lawyer do to help?

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