Attorney Ted Heiser Secures Appellate Victory Clarifying Franchise Law

The firm’s client, Aldin Associates, leases buildings to tenants for the operation of convenience stores. In addition, the tenants also signed commissioned agent agreements, whereby they agreed to act separately as Aldin’s agent in the sale of gasoline at the locations.

Aldin terminated the leases and the tenants filed suit alleging that the termination could not occur because the commissioned agent agreements created a franchise. If a franchisee, the tenants were allegedly entitled to significant protections under the Connecticut Petroleum Franchise Act.

One of the hallmarks of a franchise is that the franchisee maintains significant entrepreneurial risk. In this case, Aldin owned all of the property in question, paid for the fuel and transportation, was responsible for all material repairs, and bore essentially all of the risk of loss of fuel and money.

At trial, Ted Heiser represented Aldin and the trial court agreed with his arguments finding that no franchise existed. The plaintiffs appealed to the Connecticut Appellate Court, where Ted also represented Aldin.

The Appellate Court recently issued its decision, which again found for Aldin and determined that no franchise relationship existed. This decision is important not only for our client, but also for other companies with similar business models, because it clarifies when these types of relationships do — and do not — qualify as franchises under Connecticut law.