Author: Sandra Gibbs
Published: July 10th, 2020
Nearly all federal and state franchise laws define the term “franchise” with reference to a “fee” paid by a franchisee. What can constitute a “fee” for these purposes can vary significantly from jurisdiction to jurisdiction, and in some cases can encompass unexpected types of expenditures. This article reviews the current state of the law and urges a closer tie to the underlying purpose of the fee requirement, which is to direct regulatory efforts to addressing the abuse of captive franchisees, rather than simply to disfavor suppliers vis-à-vis dealers.