Did you know that Sears is a franchisor? I didn't before today, when I read about a lawsuit by Sears franchisees, who feel wronged in the wake of Kmart's takeover of Sears. You see, these little Sears stores (all located in rural areas and about one-fourth the size of urban Sears stores) are being forced to compete with Kmart stores that stock the same products, like Craftsman tools. The Sears franchisees negotiated exclusive territories, which they claim are being infringed.
These sorts of claims -- called "encroachment" claims -- are common among franchisors and franchisees. I would like to read the provision in the Sears Dealer Agreements, which I assume places some limits on Sears beyond the establishment of additional Sears-branded stores. In this case, Sears did not encroach by establishing new stores, but by distributing Sears products through Kmart stores, something that may not have been contemplated at the time of the agreement.
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1. Posted by Christine on June 28, 2005 @ 7:42 | Permalink
I would be interested to see if the franchise agreements had change of control provisions. I remember doing a merger once and having to look through hundreds of franchise documents to see if the agreements would be automatically assumed or whether they would have to be renegotiated.
2. Posted by Mole on August 7, 2005 @ 19:32 | Permalink
Sears took over our local dealer store in December of 2005. The transition as they called it was an utter disaster. They lied to the employees that stayed there, and fired more than half of the former owners staff. They ruined a lot of peoples lives.
3. Posted by moncler coats on October 31, 2011 @ 2:40 | Permalink
If you wish to be the best man, you must suffer the bitterest of the bitter.
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