Territorial Restrictions on Franchisees: Post-Schwinn Developments

• Author: Sigmund Timberg
• DOI: 10.1177/0003603X7401900201
• Published date: 01 June 1974
• Date: 01 June 1974

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 theCCH 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 hisfranchisees' sales. The Schwinn and Sealy cases, de-

cidedin1972, 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 wisdominthetrade-

mark

licensing

area

is currently being challenged in the halls

of Congress.

•Washington, D.C.

AUTHOR'S

NOTE:

This article is based on atalk delivered to the17th

Annual Conference of theLawyers Institute of the John Marshall

Law School on "More Developments in Intellectual

Property

Law"

on Feb.23, 1973.

205