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COURT RULES THAT RIGHT TO USE TRADEMARK AND PAYMENT OF FRANCHISE FEE ARE ESSENTIAL COMPONENTS OF FRANCHISE RELATIONSHIP

BJB Elec., L.P. v. No. Cont'l Enters, Inc. (N.D. Ill, 2010)

The parties' dispute related to a distribution agreement, whereby defendant agreed to purchase products from plaintiff, with an exclusive right to sell to customers in North America. Plaintiff alleged that Defendant failed to pay for goods delivered, and defendant counterclaimed that the parties' distribution agreement has been unlawfully terminated in violation of the Illinois Franchise Disclosure Act.

The Court dismissed the counterclaim, ruling that by failing to allege that it had the right to use the plaintiff's name or trademark, or that it paid any franchise fee, the counterclaim did not adequately allege the existence of a franchise relationship

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