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Franchise termination cases are familiar territory for experienced franchisor counsel. The complaint typically seeks termination of the franchise agreement, enforcement of a covenant not to compete, damages and injunctive relief for trademark infringement, damages for amounts past due under the franchise agreement, and an accounting for sales not reported to the franchisor. If the franchisee has stopped operating, the focus of the case is significantly narrowed. These cases may simply involve the collection of amounts due under the franchise agreement, including attorneys’ fees, costs, payments to third parties, lease payments, and any amounts due under a note. In preparing these breach of contract cases, franchisor counsel often seek remedies that will place their clients in the position that they would have occupied if the franchisees had fulfilled their contract obligations only through the date of termination. However, by limiting potential damages in this way, counsel may overlook a substantial part of the damages that franchisors suffer from premature termination of franchise agreements–“expectation damages” in the form of lost future royalties.

The Restatement (Second) of Contracts measures an injured party’s expectation interest by (1) the loss in value of the performance of the contract caused by the breaching party’s failure to perform, plus (2) any other incidental or consequential loss caused by the breach, less (3) the expenses saved by not having to perform. [FN1] Although this definition applies to amounts due to the franchisor through the date of termination, it is not the complete calculation of a franchisor’s damages for breach of a multiyear franchise agreement. Instead, counsel should consider the franchise agreement as a contract requiring certain payments over a number of years. These payments, in the absence of a breach, are due to the franchisor as an obligation of the franchisee under the franchise agreement. As a result, when a franchisee breaches, the franchisor should sue for the amounts that it otherwise would have received from the franchisee over the full term of the agreement.

Because of the unique nature of performance in a franchise relationship, a franchise termination case provides an excellent opportunity to recover expectation damages based on the profits that the franchisor would otherwise have received as part of a continuing royalty stream from the terminated franchisee. Although the nature of the franchise relationship is unusual, the damage analysis is not. A franchisor seeking lost future royalties must demonstrate certain basic elements, such as breach and causation, and prepare for certain standard defenses, such as lack of foreseeability and mitigation. As with all breach of contract actions, the circumstances of the case dictate the court’s findings. In franchise law, however, courts have, with a few aberrations, developed guidelines for determining whether a franchisor is entitled to lost future royalties.

The recovery of future royalty fees is not a revolutionary concept. However, the right to recover future fees has not been the subject of many reported decisions. Although courts may award future royalties in certain cases, they generally do not thoroughly analyze the franchisor’s right to recover. Moreover, when a court rejects a franchisor’s demand for future royalties, the decision is usually terse and may simply rely on the theory of unconscionability (i.e., it is unconscionable to require a franchisee who no longer operates to pay lost future royalties) to explain why the requested relief was denied. Because of the dearth of case law, franchise practitioners can be guided only by general contract law and a handful of decisions that provide minimal analysis of the issue.

This small collection of authority seems to begin in 1978, when a Michigan federal court confronted a franchisor’s claims for lost future royalties against a number of its franchisees. In McAlpine v. AAMCO Automatic Transmissions, Inc., [FN2] after terminating their own franchise agreements, ten Detroit-area AAMCO franchisees sued their franchisor for breach of contract and antitrust violations. [FN3] The franchisees claimed that the franchisor’s conduct entitled them to terminate the agreements and operate their centers as Interstate Transmissions. [FN4] The franchisees’ departure from the system decimated AAMCO’s market presence in the Detroit area. [FN5] AAMCO counterclaimed, alleging–among other things–that the franchisees wrongfully terminated the franchise agreements and misappropriated the AAMCO merchandising system. [FN6] AAMCO’s prayer for relief included the lost future royalties due under the franchise agreements, its expenses to reestablish centers in Detroit, and punitive damages. [ 117 FN7] After a nine-day trial, the court concluded that the franchisees breached the franchise agreements and that AAMCO was entitled to damages resulting from the breach, including lost future royalties. [FN8]

As it began its analysis of AAMCO’s entitlement to lost future royalties, the McAlpine court acknowledged the problem in many maturing franchise relationships:

As the franchise becomes successful, however, the partnership arrangement that seemed reasonable at its inception sometimes appears burdensome to the franchisee. The franchisee whose hard work has enabled him to carve out a niche of profitability comes to regard the payment of franchise fees as restricting that profitability. The franchisee who has learned a system and has reaped its benefits wonders if his new-found knowledge of the trade could enable him to prosper to a greater degree as an independent. Status, success, name, and product all seem brighter to an independent businessman or as franchisee under different terms. [FN9]

The court concluded that the franchisees’ termination of their agreements was motivated by their desire to increase profitability and to achieve a higher level of success within their communities. [FN10] The court also found that AAMCO’s conduct did not justify the franchisees’ termination of the contracts. [FN11] Based upon this wrongful termination, the court awarded AAMCO its lost future royalties for ten franchises for a period of four years. [FN12]

As the first reported case granting lost future royalties, McAlpine’s method of calculating these damages is almost as significant as the fact that the award was granted. First, the court did not grant AAMCO the full measure of damages sought. Despite AAMCO’s presentation of its anticipated sales increase for each Detroit franchise, the court refused to assume any increase in profits in computing AAMCO’s lost future royalties. [FN13] Instead, the court applied a fairly traditional damage analysis by calculating the average royalty paid by the average Detroit franchisee in 1973, the last year of operation as AAMCO franchisees. [FN14] Additionally, the court considered AAMCO’s position in the Detroit market at the time that judgment entered. [FN15] Because four years had passed since termination of the franchise agreements, AAMCO had already reestablished itself in the Detroit market by the time of trial. [FN16] As a result, the court cut off the award of future royalties on the date that AAMCO’s new Detroit franchisees generated income equal to that of the plaintiff franchisees. [FN17] The court also deducted from the lost royalty award any amounts that the new Detroit franchisees paid AAMCO during the period between termination and the lost future royalty damage cutoff date. [FN18]

Notwithstanding these limits on the damages, McAlpine recognized a franchisee’s continuing obligation to pay royalties to the franchisor beyond termination of the franchise agreement. The court also implicitly recognized AAMCO’s duty to mitigate its damages by reducing the damages to reflect the franchisor’s redevelopment of the Detroit market. Because the franchisees terminated the franchise agreements and continued to operate independent centers, however, the court’s analysis (and ultimately the award of damages) seemed to focus not on the franchisees’ continuing contractual obligations but rather on the franchisees’ conduct in wrongfully terminating the franchise agreements for their own pecuniary gain and to the detriment of AAMCO. [FN19]

Accordingly, the rights of a franchisor to collect lost future royalties under less egregious circumstances remained unclear after McAlpine. In 1993, when Burger King Corporation (BKC) filed a proof of claim for almost three million dollars against its debtor-franchisee, the U.S. Bankruptcy Court for the Middle District of Florida articulated a new approach to lost future royalties in reviewing the franchisee’s objection to BKC’s claim. [FN20] In re Mid-America Corp. involved a franchisee that operated twenty-one Burger King restaurants in Tennessee. [FN21] Immediately after filing for bankruptcy protection, the franchisee closed four of its restaurants. [FN22] BKC filed its proof of claim for amounts due under all of the franchise agreements and certain leases with the franchisee. [FN23] BKC also sought lost future royalties and advertising fees for the franchisee’s closed units. [FN24]

The franchisee argued that BKC was not entitled to future royalties because the franchise agreements granted licenses but did not impose an obligation on the franchisee to continue to operate the restaurants. [FN25] The court held that the franchise agreements imposed an affirmative obligation on the franchisee to continue to operate the restaurants for the terms of the franchise agreements and that BKC was entitled to damages for breach of the agreements. [FN26] Mid-America thus became the first reported decision requiring franchisees to honor the full term of the contract even when the franchised business itself was failing. [FN27]

The conclusion that BKC was entitled to lost future royalties unfortunately was only the first half of the analysis. As in McAlpine, the actual calculation of the award became the more significant issue, and ultimately BKC’s inability to arrive at a reasonably certain estimate of its damages defeated the award. In trying to determine the amount of damages, the court required BKC to show the lost future profit that BKC anticipated from the four stores–the lost royalties minus the expenses that BKC saved by not having to service the closed restaurants. [FN28] On this point, a BKC representative testified that, like most franchisors, BKC did not allocate its expenses per franchised restaurant, and therefore BKC could not provide the court with the information requested. [FN29] As a consequence, the court held that although the debtor had an 118 obligation to operate the restaurants and that BKC had suffered damages, the lost future royalties claim failed because, absent evidence of cost savings, the award was too speculative. [FN30] Had BKC been able to demonstrate its savings, it likely would have been awarded lost future royalties.

The decision in Mid-America, albeit not favorable to the franchisor, pushed the lost future royalty envelope beyond McAlpine because it imposed an obligation on the franchisee to pay royalties even when the franchisee no longer operated the franchised (or newly independent) business. After Mid- America, franchise agreements could be treated more like other executory contracts for purposes of calculating damages from a breach. Under Mid- America, the franchisor was not required to demonstrate that the franchisee had a bad motive or was violating the franchise agreement for personal benefit when the agreement was terminated. Instead, pursuant to Mid-America, the question of future royalties was reduced to a straightforward contract remedy issue: Is the franchisee obligated to pay royalties for a number of years and is the franchisor harmed by the franchisee’s failure to do so?

Using similar logic, another bankruptcy court allowed a franchisor’s claim for almost $275,000 in future royalties against its former franchisees. In In re Montcastle, the U.S. Bankruptcy Court for the Western District of North Carolina allowed the claim for lost future royalties filed by Postal Instant Press, Inc. (PIP), a franchisor of printing businesses, after the franchisor terminated the franchise agreement and the franchisees filed a Chapter 13 bankruptcy petition. [FN31] PIP presented evidence to demonstrate the net present value of the future royalties and advertising contributions to be paid by the franchisees and then, apparently learning from Mid-America, subtracted the costs that PIP would save over the remaining term of the contract because it was not required to service the franchisees. [FN32] Based upon this calculation, the court held that PIP had presented “a reasonable projection of the [franchisees’] future gross sales, royalties, and advertising contributions.” [FN33]

More importantly, in allowing the future royalties claim, the Montcastle court specifically recognized many factors inherent in a franchise relationship that justified PIP’s claim for lost future royalties:

In establishing a new franchisee, PIP incurs significant start-up costs. The court agrees with PIP that it would be inequitable to allow a franchisee to take advantage of PIP’s training and assistance to establish a successful printing operation and as soon as the business becomes profitable, allow the franchisee to terminate the agreement, leaving the franchisor without the contracted for ability to recoup its initial expenditures. [FN34]

The Montcastle court’s decision, perhaps for the first time, articulated a franchise-specific rationale for the award of lost future royalties. This rationale surpassed the generic contract theory that merely required a breaching party to place the nonbreaching party in the same position that he or she would have been in if the agreement had not been breached. It recognized the special and economically lopsided nature of a franchise relationship, which requires a significant initial investment by the franchisor in resources, time, and money to assist the franchisee in its first few years of operation. Based on this initial investment, as well as on the continuing assistance that may be required, the franchisor calculates the royalty payments due over the term of the franchise agreement. When a franchisor provides the assistance needed for the franchisee to operate in the system, the franchisor may legitimately expect that, over ten or fifteen years, the franchisee will comply with the terms of the franchise agreement and provide the franchisor with its expected return on investment. Montcastle acknowledged the importance of providing a franchisor with a remedy to recover its losses when a franchisee fails to satisfy its obligations under the franchise agreement. [FN35]

After Montcastle, PIP and other franchisors undoubtedly enjoyed some level of comfort that they were indeed entitled to recover lost future royalties from terminated franchisees. This comfort was transitory. In 1996, a California appellate court handed down the first reported decision holding that a franchisor was not entitled to lost future royalties from terminated franchisees. [FN36] In Postal Instant Press, Inc. v. Sealy, with the most extensive analysis of the issue in any reported decision, the California Court of Appeal reversed a lower court ruling awarding PIP lost future royalty payments. [FN37] PIP had terminated the defendant franchisees seven years before the expiration of the franchise agreement for failure to pay royalties, [FN38] and then sued for amounts due under the contract. [FN39] In reviewing the franchisor’s request for lost future royalties, the appellate court concluded that the question of the franchisor’s entitlement to such damages was “a case of first impression not only in California but the entire nation.” [FN40]

The Sealy court rejected all of the authority that PIP presented in support of the award of future royalties, [FN41] determining that in every case the party ordered to pay these damages had committed a breach that “involved [a] total failure to perform at all.” [FN42] Because the franchisees’ breach in Sealy consisted only of a failure to make past royalty payments, the court held that PIP’s precedent did not apply. [FN43]

Instead, the court looked at the causation of the damages and concluded that the franchisees’ failure to make timely payments of amounts due under the franchise agreement was not a “proximate” or “natural and direct” cause of PIP’s loss of future royalties. [FN44] The court decided that PIP’s conduct in terminating the franchise agreement directly prevented the 119 franchisees from operating as PIP businesses and consequently cut off PIP’s entitlement to receive future royalty payments. [FN45] In short, the court reasoned that PIP had caused itself to lose the future royalties and thus could not recover. [FN46] Instead, damages for past due royalty payments provided PIP with its “benefit of the bargain” under the franchise agreement and were, therefore, the only damages allowable under contract principles. [FN47]

In Sealy, the circumstances under which the franchise agreement was terminated again became critically important in determining the franchisor’s entitlement to future royalties. When a franchisor terminates the franchise relationship based on the franchisee’s failure to pay, Sealy holds that the franchisor has eliminated its right to obtain the full benefit of its bargain through the award of future royalties. This issue continues to split courts throughout the country and Sealy continues to be the case to apply or distinguish on the issue of lost future royalties. Of course, as a practical matter, the Sealy approach leaves the franchisor in an untenable position, forced to choose between terminating the franchise agreement and recovering only past unpaid royalties, and continuing the relationship so that it can sue the franchisee periodically to collect what is owed at that time.

Litigation After Sealy: Where Are We Now?

Despite the flaws in the practical application of Sealy and much to the chagrin of franchisors, many courts relied on Sealy as the leading case on the recovery of lost future royalties. In I Can’t Believe It’s Yogurt v. Gunn, the federal court in Colorado quoted extensively from Sealy in denying lost future royalties to a frozen yogurt franchisor that had terminated its franchisee for failure to make payments due under the franchise agreements. [FN48] As in Sealy, the ICBIY court held that “any loss of future royalties was proximately caused by ICBIY’s election to terminate the Franchise Agreements.” [FN49]

Other courts recognized Sealy as authority on the issue but chose to distinguish their cases based on disputes over the franchisees’ role in the termination of the franchise agreements. In Oil Express National, Inc. v. D’Alessandro, for example, an Illinois federal magistrate judge recommended denial of a franchisee’s motion for summary judgment on the issue of a franchisor’s entitlement to lost future royalties. [FN50] The franchisee argued that, applying Sealy, the franchisor was not entitled to lost future royalties because the franchisor terminated the franchisee’s agreements. [FN51] The magistrate judge concluded that Sealy did not control because California law did not apply to the parties’ dispute and because the Oil Express franchisee had been charged with anticipatory repudiation of the franchise agreement, an element missing from the Sealy analysis. [FN52] Based on the franchisor’s claim that the franchisees did not intend to pay any further royalties, the Oil Express court held that Sealy did not prevent an award of future royalties to the franchisor. [FN53] Likewise, in Remedytemp, Inc. v. Taylor, the federal court in Philadelphia denied a franchisee’s motion for summary judgment on its franchisor’s claim for future royalties. [FN54] Although the franchise agreement chose California law, the court held that Sealy would not prevent the franchisor from pursuing its remedies for lost future royalties because it was unclear which party terminated the franchise agreement. [FN55] If the jury ultimately determined that the franchisee terminated the contract, the Remedytemp court held, “nothing in [Sealy] rules out the possibility of [the franchisor’s] recovery of lost future profits.” [FN56]

Each of the above cases, whether following or distinguishing Sealy, demonstrates the significant development in the law of lost future royalties that Sealy prompted. Sealy set forth a framework to guide a court’s analysis of a lost future royalties claim. One fact that is critical to that analysis is to decide which party terminated the franchise agreement. Under Sealy, the franchisor’s termination of the franchise agreement based on the franchisee’s failure to pay royalties will result in denial of a future royalties award. If the franchisee terminates, however, lost future royalties may be available.

As the only decision providing a full assessment of the terminated franchisee’s obligation to pay future royalties, Sealy has become the most important case for franchisees attempting to avoid these damages. It has also potentially created a loophole for franchisees seeking to get out of their franchise agreements without risking a judgment for future royalties. Consider the following set of facts. A franchisee decides to leave its franchise system and stops paying royalties for some period of time. The franchisor sends a notice of default to the franchisee. The franchisee does not cure. Finally, the franchisor terminates the agreement and institutes a lawsuit. The franchisee takes its signs down and begins to operate an independent business.

Under this scenario, in states that refuse to enforce restrictive covenants, a defaulting franchisee may escape liability for future damages under the franchise agreement unless the franchisor can demonstrate that the failure to pay constituted an anticipatory repudiation of the franchise agreement. If a franchisor is unable to show repudiation, the franchisor should carefully weigh its options before electing to terminate the agreement. For example, the franchisor may choose simply to sue the delinquent franchisee for amounts due rather than terminate the agreement and consequently cut off its rights to future royalties. Once an action is instituted or judgment is entered, the franchisee, under the pressure of the litigation, may decide to terminate the agreement or abandon its operation altogether. This conduct on the part of the franchisee can give rise to a claim for lost future royalties and may better accomplish the franchisor’s goal of protecting its system and providing incentives to franchisees to remain in compliance.

Does Sealy Matter?

Not all courts view Sealy as controlling or even persuasive authority on the issue of lost future royalties, however. As a result, the confusion over lost future royalties continues. Some courts have disregarded Sealy altogether. In Burger King Corporation v. Barnes, a federal district court in Florida did not factor Sealy into its lost future royalties analysis at all, even though the franchisee operated a Burger King franchise in Los Angeles. Instead, the court, reviewing the case under Florida law, simply permitted BKC to revisit its 120 Mid-America future royalties claim, which, as set forth above, had failed to produce an award for BKC when the company could not present proof of the savings derived from the closing of the debtor’s restaurants. [FN57] In Barnes, the franchisee had advised BKC in writing that it intended to close its restaurant and stop performance under the franchise agreement. [FN58] BKC sued for breach and sought damages for lost future royalties. In its calculation of lost profits, BKC addressed the critical issue raised by the Mid-America court. Although BKC still contended that it did not receive any reduction in costs as a result of the franchisee’s breach, BKC presented evidence regarding the total amount that it spent servicing its franchisees through BKC employees. [FN59] From this amount, BKC determined its annual per-restaurant cost of operations. [FN60] BKC then subtracted the annual cost from its calculation of the franchisee’s total future royalties and presented its lost profit calculation reduced to net present value. [FN61]

The Barnes court accepted this approach and awarded BKC damages for lost future royalties despite the franchisee’s objection that the damages were too speculative and that BKC had failed to mitigate. [FN62] Significantly, the court held that BKC had no duty to mitigate or to minimize its losses because the franchise agreement was a nonexclusive contract. [FN63] When the terms of an agreement permit a plaintiff to enter into similar contracts, the court reasoned, the plaintiff has no duty to avoid foreseeable consequences upon the defendant’s breach. [FN64]

The U.S. District Court for the Eastern District of Pennsylvania, in two recent cases dealing with this issue, Maaco v. Waters [FN65] and Maaco v. Cintron, [FN66] also ignored Sealy. Maaco Enterprises, Inc., a franchisor of auto painting and body repair centers, was awarded lost future royalties in both Waters and Cintron where Maaco had terminated the franchise relationship based on the franchisees’ failure to perform. Even though the franchisees presented no defense to the complaints, failed to answer, and did not appear at hearings on motions for default judgment, the court in each case felt compelled to determine whether an award of lost future royalties was appropriate where the franchisees had either closed their center or were being ordered to do so by the court.

Both cases were filed in federal court in Philadelphia and involved similar facts, but different judges handled the cases and each took a different approach to the future damages issue. In Waters, the court questioned the basis for calculating future royalties from franchisees that had been enjoined from operating their businesses. The court reasoned that the fact that the business was closed (either by order of court or by the franchisee’s act) presented a considerable hurdle to overcome in awarding damages based upon weekly gross receipts. If the franchisee had lost its ability to generate gross receipts, the court reasoned, calculation and payment of the royalty would not be possible. Based on this perceived incongruity, the court was disinclined to enter such a substantial judgment against the absent franchisees. As a compromise position (without much legal basis), the Waters court agreed that Maaco had proven and was entitled to judgment by default on its other claims, but reserved judgment on the lost future royalties award until the franchisees were given another opportunity to respond and prevent entry of the substantial judgment against them. The court entered an order requiring the franchisees to show cause why the award for lost future royalties should not be granted. [FN67]

Although the franchisees responded and appealed the default judgment to the Third Circuit, their appeal was ultimately dismissed for failure to prosecute. The district court then entered judgment for the full amount of lost future royalties without further analysis of Maaco’s entitlement to the award. [FN68] Thus, although Waters ultimately awarded damages for lost future royalties, like so many of the prior cases, it provides little assistance to the practitioner in deciding the best approach for securing a lost future royalties award.

The Cintron court took a more analytical approach. Although the court initially expressed the same concern as the Waters court over the calculation of lost future royalties for a nonoperating business, Cintron relied on a traditional contract analysis under Pennsylvania law, which governed the franchise agreement, to support the award of lost future royalties. [FN69] Cintron reasoned that because Pennsylvania law allowed lost profits–“the difference between what the plaintiff[s] actually earned and what they would have earned had the defendant not committed the breach”–Maaco was entitled to receive the lost future royalties that it would have received had the franchisees not breached the franchise agreement. [FN70] Under Pennsylvania law, the court held that, as the nonbreaching party, Maaco was entitled to be placed in nearly the same position that it would have occupied had there been no breach. [FN71]

As the most recent precedent awarding lost future royalties to franchisors, both Waters and Cintron are in direct contrast to Sealy because they held that a franchisor was entitled to lost future royalties even when it had terminated the franchise relationship. Although Waters provides little assistance to litigators, Cintron returns the lost future royalties analysis to its roots as a contract remedy available to any nonbreaching party, large or small, under the theory of expectation damages. [FN72]

The case law on a franchisor’s right to recover damages for lost future royalties remains murky. Despite the numerous 121 policy concerns that courts have raised concerning lost future royalties, franchisors continue to rely on the nature of the franchise relationship, basic contract law, and the language of the franchise agreement itself to support their claims. As more franchisors demand the full measure of their contract rights, the possibility of the development of a cogent body of law on lost future royalties continues to grow.

[FNa1]. Joseph Schumacher is a partner with Fisher Schumacher & Zucker LLC in Philadelphia, and Kimberly Toomey is an associate with the firm.

[FN1]. Restatement (Second) of Contracts § 347 (1981).

[FN2]. 461 F. Supp. 1232 (E.D. Mich. 1978).

[FN3]. McAlpine, 461 F. Supp. at 1238.

[FN4]. Id.

[FN5]. Id. at 1262-63.

[FN6]. Id. at 1238.

[FN7]. Id. at 1274-75.

[FN8]. Id. at 1238.

[FN9]. Id. at 1239.

[FN10]. Id. at 1253-54.

[FN11]. Id.

[FN12]. Id. at 1274-75.

[FN13]. Id.

[FN14]. Id. at 1275.

[FN15]. Id.

[FN16]. Id.

[FN17]. Id.

[FN18]. Id.

[FN19]. Id. at 1274.

[FN20]. In re Mid-America Corp., 159 B.R. 48 (Bankr. M.D. Fla. 1993).

[FN21]. Id. at 49.

[FN22]. Id. at 50.

[FN23]. Id.

[FN24]. Id.

[FN25]. Id. at 53.

[FN26]. Id. at 54.

[FN27]. Id.

[FN28]. Id. at 55.

[FN29]. Id.

[FN30]. Id.

[FN31]. In re Montcastle, Bus. Franchise Guide (CCH) ¶ 10,534, at 26,079 (Bankr. W.D.N.C. Sept. 2, 1994).

[FN32]. Id.

[FN33]. Id.

[FN34]. Id. at 26,078.

[FN35]. Id. at 26,079.

[FN36]. Postal Instant Press, Inc. v. Sealy, 43 Cal. App. 4th 1704, 51 Cal. Rptr. 2d 365 (1996). Although BKC did not obtain an award of lost future royalty damages in Mid-America, the Mid-America court recognized that such damages were recoverable.

[FN37]. Id. at 1706.

[FN38]. Id.

[FN39]. Id.

[FN40]. Id.

[FN41]. Id. at 1711-12.

[FN42]. Id. at 1711.

[FN43]. Id. at 1712.

[FN44]. Id. at 1713.

[FN45]. Id.

[FN46]. Id.

[FN47]. Id. at 1710.

[FN48]. I Can’t Believe It’s Not Yogurt v. Gunn, 1997 U.S. Dist. LEXIS 14480 (D. Colo. Apr. 15, 1997).

[FN49]. Id. at 65.

[FN50]. Oil Express Nat’l, Inc. v. D’Alessandro, 1997 U.S. Dist. LEXIS 13619 (N.D. Ill. Sept. 5, 1997).

[FN51]. Id. at 15-16.

[FN52]. Id. at 17.

[FN53]. Id. at 17-18. The district court judge later accepted the magistrate judge’s report and recommendation over the objections of the franchisees and denied summary judgment. See Oil Express Nat’l, Inc. v. D’Alessandro, 1998 U.S. Dist. LEXIS 9437 (N.D. Ill. June 15, 1998).

[FN54]. Remedytemp, Inc. v. Taylor, 1998 U.S. Dist. LEXIS 1474 (E.D. Pa. Feb. 5, 1998).

[FN55]. Id. at 6.

[FN56]. Id.

[FN57]. Burger King Corp. v. Barnes, 1 F. Supp. 2d 1367 (S.D. Fla. 1998).

[FN58]. Id. at 1368.

[FN59]. Id. at 1370.

[FN60]. Id.

[FN61]. Id.

[FN62]. Id. at 1371-72.

[FN63]. Id. at 1372.

[FN64]. Id.

[FN65]. 2000 U.S. Dist. LEXIS 10293 (E.D. Pa. July 7, 2000). The authors were counsel for Maaco in this case.

[FN66]. 2000 U.S. Dist. LEXIS 6911 (E.D. Pa. May 17, 2000). The authors were counsel for Maaco in this case.

[FN67]. Waters, 2000 U.S. Dist. LEXIS 10293, at 3.

[FN68]. Id. at 7.

[FN69]. Although the franchisees had presented no defense at all and although Maaco had provided persuasive case law supporting the award of lost future royalties, the Cintron court required additional briefing from Maaco to support the judgment. The court insisted that Maaco provide specific statutory or common law analysis authorizing an award of those damages.

[FN70]. Cintron, 2000 U.S. Dist. LEXIS 6911, at 10 (quoting AM/PM Franchise v. Atlantic Richfield, 584 A.2d 915, 922 (Pa. 1990)).

[FN71]. Id. (quoting Mellon Bank, N.A. v. Aetna Business Credit, Inc., 500 F. Supp. 1312 (W.D. Pa. 1980)).