Recent MSI Legal Case Explained
The Judge did award past due royalties plus attorney's fees to Medicine Shoppe. However, the court held that under Missouri law (the law that controlled the franchise agreement) lost future royalties were not recoverable under the circumstances of this case, noting: "Here, nowhere in the (Franchise) Agreement is it evident that either party contemplated the payment of future license fees in the event of termination."
Financially troubled franchisees who are facing lawsuits or arbitrations by Medicine Shoppe for lost future royalties will certainly want to call the judge or arbitrator's attention to this important case. However, franchisees must be careful not to read too much into it and should not view this case as a free pass to abandon their franchises. This case involved a franchisee who appeared to be in financial difficulty and was already behind on past due royalties.
This case is important to the Medicine Shoppe franchise community. At this time, we do not know if Medicine Shoppe plans to appeal the decision, but we will follow it closely. Read the court documents here.