April 1, 2004
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Barry M. Heller
Scott McIntosh
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California Decision Clarifies Franchise Termination Damages

What damages are available to a franchisee under the California Franchise Relations Act (CFRA) for a wrongful termination or nonrenewal? In JRS Products, Inc. v. Matsushita Electric Corp. of America, 115 Cal. App. 4th 168, 8 Cal. Rptr 3d 840 (Cal. App. 2004), modified on denial of reh’g, a California court of appeals clarified that a franchisee who alleges that it was terminated without good cause in violation of the CFRA is not limited to the repurchase of inventory as its exclusive remedy. However, the court determined that a termination without good cause sounds fundamentally in breach of contract and that a franchisee must pursue its action and its remedies under contract law, rather than tort law. The significance of this is that terminated franchisees are less likely to be able to recover punitive or exemplary damages.


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Summary of 2004 IFE Sessions
Click here for more information on sessions involving Piper Rudnick lawyers.
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Upcoming Events
13th Annual International Franchise Expo April 30-May 2, 2004 Washington Convention Center Washington, DC
37th Annual IFA Legal Symposium May 23-25, 2004 Washington, DC
21st Annual IBA/IFA Joint Seminar on International Franchising May 25-26, 2004 Washington, DC


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