Top franchise cases of 2013
By Barry M Heller, John A Hughes and John J Dwyer
Three significant 2013 cases from our webinar reviewing 2013’s top franchise decisions are summarised below.
1. In Hanley v Doctors Express Franchising LLC, a former franchisee of the Doctors Express franchise system sued Doctors Express, the franchisor, and Rhino 7, a broker involved in the franchise sale, asserting that the disclosure documents contained misrepresentations and nondisclosures regarding required initial investment, initial operating capital requirements, physician credentialing/health insurance reimbursement process and projected earnings.
In their motion to dismiss, Doctors Express argued that numerous disclaimers barred the former franchisee from relying on any statements outside of the documents and that its reliance was thus unreasonable. The former franchisee argued that the Maryland Franchise Law voided such disclaimers by prohibiting a franchisor from conditioning a franchise sale on the prospective franchisee’s release of any persons from liability. The district court agreed, but recognised the disclaimers could eventually establish that reliance on the alleged statements was unreasonable…
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