Franchise and Trade
                           Regulation Update
                                           December 12, 2011

Is That Really My Problem? Case Highlights Need to Verify Franchise Disclosure Data By: David L. Cahn, Esq. A recent decision in A Love of Food I, LLC v. Maoz Vegetarian USA, Inc., Case No. AW-10-2352, Bus. Franchise Guide (CCH) ¶ 14,633 (decided July 7, 2011), the United States District Court for the District of Maryland, in denying a motion to dismiss, highlighted the need for franchisors to vigilantly update their government-required disclosure document to maintain its accuracy, while also providing a valuable reminder as to the geographic scope of state franchise sales laws' application. Click here to read the full article. Can They Really Do That? Franchisees' Liability For Lost Future Royalties After Store Failure By: David L. Cahn, Esq. In its recent decision of Meineke Car Care Centers, Inc. v. RBL Holdings, LLC, et al., Case No. 09-2030, Bus. Franchise Guide (CCH) ¶ 14,586 (decided April 14, 2011), the United States Court of Appeals for the Fourth Circuit provided valuable guidance on one of the most important legal issues for franchisors and franchisees. Specifically, if a franchisee closes franchised businesses that it can no longer afford to operate, can its franchisor obtain a judgment for "lost future royalties" that it would have earned had the businesses continued to operate. Click here to read the full article. Talking To Your Competitors Can Be Risky By: David L. Cahn, Esq. Two guilty pleas announced by the U.S. Department of Justice's Antitrust Division highlight an underappreciated area of serious legal liability – price coordination in violation of the Sherman Act. On August 24, 2011, the Justice Department announced the guilty plea of Great Lakes Concrete, one of four Iowa companies that sell "ready-mix concrete" for construction projects. The companies have pled guilty to reaching agreements regarding their respective price lists and project bids, and then accepting payment for those sales at prices artificially increased due to collusion. The press release emphasizes the maximum fine that may be imposed for the conviction, which is the greater of $100 million, twice the gain derived from the crime or twice the loss suffered by the victims of the crime. In addition, the president of Great Lakes Concrete was sentenced to serve a year and a day in prison. Click here to read the full article.

About this newsletter Welcome to the first edition of the WTP Franchise and Trade Regulation Update. There have been several interesting cases during the past year, some of which are highlighted in this newsletter. Please send me your thoughts and topic suggestions. ~ David L. Cahn, Esq. Editor, dcahn@wtplaw.com Learn more about our Franchise Law Group

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