Franchise, Terminations Under the Sherman Act : Populism and Relational Powers

Abstract

Professor Bohling discusses two categories of franchise terminations that have largely escaped effective antitrust regulation. The first category includes terminations performed pursuant to an agreement between the franchisor and an existing or prospective franchisee to eliminate or replace another franchisee; the second involves terminations performed unilaterally by the franchisor for reasons other than the enforcement of restrictive marketing or exclusive dealing requirements. Part I of the article examines the propriety of regulating these categories of franchise terminations under the antitrust laws in light of the underlying antitrust policy objectives. This discussion concludes that franchisees deserve protection from arbitrary terminations, and that extending this protection is consistent with the objectives of the antitrust laws. Part II of the article discusses the first category of franchise terminations-those pursuant to agreements between a franchisor and an existing or prospective franchisee-as potentially violative of section. Part III considers the second category of franchise terminations-those performed unilaterally by the franchisor-and finds them potentially violative of the attempt to monopolize clause of section.