(Solution Download) 1 How does the Illinois Franchise Disclosure Act define a


1. How does the Illinois Franchise Disclosure Act define a ?franchise?? What elements of that definition were at issue here?
2. Do you think that either To-Am or MCFA thought it was creating a franchise relationship when the parties first entered into this relationship?
3. Do you think that the outcome of this case is fair? What public policy considerations might support this outcome?
4. Where should franchisors such as MCFA go to seek redress from this statute and its broad definition of franchises?

Legal terms often have specialized meanings that can surprise even a sophisticated party. The term ?franchise,? or its derivative ?franchisee,? is one of those words. The question in this case is whether the district court correctly ruled that certain payments that To-Am Equipment Company made to Mitsubishi Caterpillar Forklift America (MCFA), in connection with To-Am?s distributorship for certain Mitsubishi products, could constitute franchise fees within the meaning of the Illinois Franchise Disclosure Act of 1987. That ruling in turn set the stage for a jury verdict in To-Am?s favor awarding it $1.525 million in damages for MCFA?s termination of its distribution agreement. MCFA challenges the lower court?s legal ruling on appeal. * * * We affirm.

 







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