Territorial Restrictions on Franchisees: Post-Schwinn Developments

Date01 June 1974
DOI10.1177/0003603X7401900201
Published date01 June 1974
AuthorSigmund Timberg
Subject MatterArticle
TERRITORIAL
RESTRICTIONS
ON
FRANCHISEES:
POST-SCHWINN
DEVELOPMENTS
by
SIGMUND
TIMBERG·
It
has been recently estimated
that
franchising currently
accounts
for
25% of all retail sales.
At
times it seems as
though franchising disputes account
for
an even higher per-
centage of all
antitrust
lawsuits.
Areview of the CCH and
ATTR
antitrust
services over a
four-month period discloses franchisor-franchisee
antitrust
disputes in industries as diverse as
fast
food
restaurants,
grocery stores, beer, soft drinks, giftware stores, bicycles,
lawn and
turf
equipment, swimming pool equipment and com-
puter
training schools. The cases have covered most of the
usual
antitrust
violations associated with distribution
and
marketing and some new issues relating to class action
and
procedural matters.
Amid this welter
of
cases, a continuing battleground in
the heady
war
between the franchisor, the franchisee
and
the
antitrust
enforcement authorities relates to the
right
of the
franchisor to impose
territorial
restrictions or limitations
on his franchisees' sales. The Schwinn and Sealy cases, de-
cided in 1972, struck as clear and dogmatic a blow
at
restraints
on alienation as
lay
within the power of the Supreme Court.
But
the implications of those revolutionary decisions
are
still
being unravelled. And their economic wisdom in the trade-
mark
licensing
area
is currently being challenged in the halls
of Congress.
Washington, D.C.
AUTHOR'S
NOTE:
This article is based on a talk delivered to the 17th
Annual Conference of the Lawyers Institute of the John Marshall
Law School on "More Developments in Intellectual
Property
Law"
on Feb. 23, 1973.
205

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