Franchisees and dealers frequently complain that their franchisors, suppliers or manufacturers have injured them by engaging in unfair competition or unfair practices. However, franchisees and dealers generalized usage of the term “unfair competition” is far more encompassing than how it is defined under relevant trade practice laws and statutes. Unlike antitrust laws, which have readily identifiable and specific elements of prototypical transgressions, the laws regarding unfair competition and practices differ significantly across states and jurisdictions.
Legislation That Protects Franchisees From Unfair Or Deceptive Acts And Practices
Historically, unfair competition law generally covered trademark infringement, as well as related ‘passing off’ violations, under which the public is deceived about the origin of particular products and services. This deception regarding the genesis of certain products and services, usually involved the misuse of trademarks. As time went on, unfair competition law began to encompass other deceitful and dishonest trade conduct that confused the public. In turn, the federal government, as well as state legislatures, banned “unfair acts and practices” and “unfair methods of competition.” These terms were and remain undefined by statute. Accordingly, and predictably, courts then became the final arbiters of what types of conduct would be prohibited.
As unfair commercial practices continued to multiply, states, and at times the federal government, passed unfair competition statutes to protect consumers and competitors from being beaten down by unethical and dishonest conduct in the marketplace. The Lanham Act, a federal statute that prohibits trademark infringement, is one of the most frequently used unfair competition statutes. Ironically, franchisors and suppliers sometimes use the Lanham Act to legitimize their wrongful termination of a franchise or dealer agreement or their shutting down of franchisees and suppliers’ post-termination operations.
However, the Federal Trade Commission Act, not the Lanham Act, is the most important piece of legislation that protects franchisees from unfair or deceptive acts and practices. Under this Act, the Federal Trade Commission promulgated the Federal Trade Commission Disclosure Rule, which establishes that franchisors and suppliers must disclose certain information before selling dealerships or franchises. Unfortunately, every court that has considered the issue has held that the law does not allow franchisees and dealers to sue privately and individually for violations of the Act.
Instead, the Federal Trade Commission itself has enforced the Act by attacking some of the most egregious violations by franchisors, manufacturers and suppliers. But the number of such enforcement actions is infinitesimal given the actual amount of franchisors, manufacturers, and suppliers’ unfair actions. However, some state legislation, similar to the Federal Trade Commission Act, does permit franchisees and dealers to sue for certain unfair acts and practices. In addition, under some state franchise laws, franchisees and dealers that have been damaged by an unfair franchisor, manufacturer or supplier’s conduct may pursue a private cause of action against them.
Success Of Goldstein Law Firm Combatting Unfair Competition By Franchisors, Suppliers And Manufacturers
Jeff Goldstein and the Goldstein Law attorneys have over thirty years of franchise and distribution law experience, during which time they have successfully represented only franchisees and suppliers. Many of Attorney Goldstein and Goldstein Law’s clients were victims of unfair acts and practices by their franchisors, suppliers and manufacturers.
Although most statutes prohibiting unfair competition focus on pre-sales disclosure requirements, other legislation allows franchisees and dealers to sue based on transgressions that were made during the tenure of the franchise or distribution relationship. For instance, a franchisor or dealer’s well-plead complaint may be able to withstand a motion to dismiss its claims of wrongful termination and treatment by franchisors, suppliers and manufacturers. Further, Jeff Goldstein and the Goldstein Law Firm have been greatly successful in obtaining significant compensation for franchisees and dealers that were wrongfully terminated based upon unfair franchisor, manufacturer and supplier conduct.
What To Do If You Suspect You Have Been Injured By Your Franchisor, Supplier Or Manufacturer’s Unfair Competition
To effectively fight back against franchisor or supplier unfair trade practices, you should contact Jeff Goldstein at the Goldstein Law Firm at (202) 293-3947. Don’t let your franchisor or supplier’s unfair acts and practices destroy your personal and business prosperity.