Distribution and Franchise Disputes

Manufacturers and other sellers of goods and services reach their markets through a variety of means, including distributor agreements, contracts with sales representatives, and franchise relationships.

Disputes between the manufacturer/seller/franchisor, on the one hand, and the distributor/sales representative/franchisee, on the other, are frequently subject to arbitration under the relevant contracts. The stakes in these disputes are high, as they often involve the survival of the distributor or franchisee as a going concern.

This article describes common characteristics of distribution controversies, remedies that may be available, advantages of using arbitration, and relevant considerations in drafting the arbitration clause.