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Patricia O'Connell
Senior Communications Manager

WRF Successfully Represents Franchisor In Complex Litigation

June 1, 2000

Washington, DC—Arthur Cantor, Peter Klarfeld and Michael Sturm successfully represented a California-based resturant franchisor in complex litigation brought by most of a franchisees and their franchisee association.

The plaintiffs alleged that the franchisor had interfered with franchisees' rights of association in violation of a California franchise statute, had misled them and/or had omitted material facts in disclosures related to renewal rights, and, most significantly, had misappropriated some $20 million in payments from suppliers that, according to the plaintiffs, were intended to be shared with franchisees. Working in close cooperation with in-house and local counsel, the WRF attorneys obtained a summary judgment dismissing all of the plaintiffs' claims of irregularities with respect to supplier payments. This prompted a number of the plaintiffs to settle on terms favorable to the franchisor.

Thereafter, the Court made evidentiary rulings that eliminated the misrepresentation and non-disclosure claims. The franchisor then was able to settle the remaining claims with the franchisee association on very favorable terms and to enforce the settlement agreement when the association sought to renege.