Franchising Case Study: Morley-Murphy Vs. Zenith Electronics

Legal environment of franchising Outline:

I. Introduction

II. Definition of franchise, franchisor and franchisee

III. Rights and obligations

IV. Types of franchises

V. Payments and contract arrangement

VI. Franchise regulations in the USA and in the EU

VII. Case study: Morley- Murphy vs. Zenith Electronics

VIII. Conclusion In this research paper I would like to determine franchising and its types, legal and business aspects, what rights and obligations involved in the process and show how it works in real life using the case study. According to Roger Miller, the author of the book “Essentials of the Legal Environment”, franchise is an arrangement in which the owner of trademark, a trade name, or copyright licenses

There was a conflict between two companies Morley-Murphy and Zenith Electronics. Morley-Murphy was s distributor of Zenith’s consumer electronic products under a series of annual distributorship agreements. Big losses in Zenith led to reorganization in the company, including its distribution system. So they decided to use “one-step distribution”, when products ship directly from factory to retailers’ warehouses and formally terminated work with Morley-Murphy without any explanations. Morley-Murphy sued zenith for violation the Wisconsin Fair Dealership Law, which prohibits the termination of a dealership agreement without good cause. However, Morley-Murphy lost the case because Zenith’s economic circumstances constitute good reason. They were losing money under the relationship with Murphy.

But we shouldn’t forget that franchise regulations and laws differ depending on location. And it could have another outcome in different country or