Broussard v. Meineke Discount Muffler Shops, Inc.; franchisors as fiduciaries in handling marketing dollars: whose money is it anyway?

Article Abstract:

Franchisors should not be overly concerned but can take precautions to avoid franchisees' assertions that franchisors owe them a common law fiduciary duty of care in their handling of marketing funds as in Broussard v. Meineke Discount Muffler Shops, Inc. The US Western District Court of North Carolina's decision allowing the issue of fiduciary duty to be determined by jury was wrong and anachronistic. Contract law contains adequate protections for franchisees and is the established and proper law controlling franchise relations. Suggested methods of avoiding a Broussard problem are presented.

Other Justice, Public Order, and Safety Activities, Franchise Law, Laws, regulations and rules, Commercial law, Fiduciary duties

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Franchisors: will they set price ceiling? The high court 'Kahn' decision holding that maximum vertical prices are not per se illegal may not give franchisors free rein

Article Abstract:

The US Supreme Court's 1968 decision in Albrecht v. Herald Co. confirmed that the per se rule barred vertical maximum price fixing, and the per se rule survived for 30 years until its overruling by State Oil Co. v. Khan, which held that the rule did not apply to vertical maximum price-fixing. The distributors' maximum resale prices imposed by suppliers was not anti-competitive. In fact, sometimes it could lead to lower prices for consumers. The ruling could result in franchisors' increased attempts to impose price ceilings on franchisees.

Finance, Price fixing

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Facts are stubborn (and dangerous) things: a closer look at Broussard v. Meineke Discount Muffler Shops, Inc

Article Abstract:

A federal district court ruled in Broussard v. Meineke Muffler Shops, Inc. that the defendant owed a limited fiduciary duty to dealers with respect to franchisee advertising and that it had breached this duty by secretly profiting from management of the WAC fund. Courts outside North Carolina, where this case was tried, have observed tat a fiduciary relationship can can arise with franchise advertising on the part of franchisors, and the North Carolina definition of fiduciary relationships is in line with that of other states.

Automobile equipment and supplies industry, Automotive parts industry

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