Abandoning Franchisee’s Claims Against Franchise Denied!

What is a franchisee to do when faced with a notice of default?  Abandon the franchise?  Should the franchise de-brand and begin operating as an independent business?  And, counter sue the franchisor for wrongful termination of the franchise?

That is what one BW-3 franchise in Akron Ohio did.  The case is Buffalo Wild Wings, Inc. [BWW] v. BW-3 of Akron, Inc.  Franchisor BWW sent the Akron franchisee a notice of the default for failure to update operating standards.  The Akron franchisee had 30 days to cure the default.  The Akron franchisee looked at the price tag to update and decided ‘naww not doing that.’  Instead the Akron Franchisee de-branded and began operating as an independent business using the name Gridiron Grill.

Franchisor sent the Akron Franchisee a Notice of Termination of Licensing Agreement but stated that it was holding termination in abeyance pending resolution by this case at hand.

Can the Akron franchise claim wrongful termination of the franchise?

The Court said ‘No.’  The franchise was not terminated.  The Akron franchisee abandoned the franchise by ceasing to the operate the business under the BW-3 name.  The Akron franchisee’s counterclaim for wrongful termination of the franchise agreement was dismissed.

The Court further sided with franchisor BWW maintaining that the Akron franchisee’s failure to the update the franchise per brand standards could, in fact, be a violation of franchisor’s trademark rights and could possibly lead to customer confusion.

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