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Patricia O'Connell
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poconnell@wileyrein.com

WRF Litigators Secure Favorable Settlement for H&R Block on Valuation of Formerly Franchised Businesses

January 14, 2004

Washington, DC—H&R Block, Inc. has reached a favorable $130 million settlement with nearly a dozen of its former major franchisees regarding the purchase price for their formerly franchised businesses. Those businesses had operated or subfranchised hundreds of H&R Block tax preparation offices in large territories across the country. WRF franchise partners Peter J. Klarfeld, Arthur I. Cantor and Michael L. Sturm and associate Benjamin B. Reed handled the case for H&R Block.

The purchase price dispute stemmed from Block’s decision several years ago not to renew the franchise agreements held by a number of its largest and oldest franchisees. Under the terms of the franchise contracts, each former franchisee was entitled to a "fair and equitable" price for its business upon termination.

In a test case that went to trial late last year, a state-court jury in Kansas City, Missouri rejected the business valuation claim of one of the franchisee-plaintiffs and awarded the franchisee a fraction of the amount it had sought. This settlement followed. Reached after intensive mediation lasting several days, it resolves the purchase price issue and all other disputes involved in the pending litigation.

Read related press release, WRF Litigators Win Favorable Jury Verdict for H&R Block on Valuation of Franchise.

Wiley Rein & Fielding’s Franchise Litigation team is among the most experienced in the country. Our litigators have defended franchisors in virtually every type of case that can arise out of the franchise relationship. We represent clients regularly in state and federal courts throughout the country, as well as in arbitration proceedings and government investigations.