Publication

Abstract

Nebraskan businesses have suffered significantly during the ongoing Covid-19 pandemic with hundreds of businesses forced to close shop. Although Nebraska’s economy is projected to rebound, businesses face an uncertain future with compounding issues. The Covid-19 pandemic has proven to be an impetus for suppliers and manufacturers to rethink their distribution strategy. Inflation, the uncertain length of the pandemic, and nationwide supply chain disruptions affecting the distribution of everything from automobiles to Christmas trees have created an environment ripe for manufacturers to fundamentally alter their distribution network. Adding these complications to an already increasingly Amazon-ified economy spells trouble, and Nebraska businesses are no exception.

Thankfully, enacted in 1978, the Nebraska Franchise Practices Act (“NFPA”) provides Nebraska-based businesses a powerful defense against these concerns. Although only ten sections in length, the NFPA possesses enormous potential for franchisees in an uncertain economic environment. The NFPA protects franchisees—broadly written to potentially include many Nebraskan dealers, distributors, and retailers—from termination, cancellation, and non-renewal, absent good cause and proper notice. The statute allows franchisees to bring an action seeking damages and injunctive relief for violations of the NFPA. By all means, the NFPA appears to be a godsend for most Nebraska businesses, but the statute is significantly underutilized.
This article introduces the “husked” potential of the NFPA, and attempts to explain the bounds of the statute’s protection and how the courts may treat the NFPA, absent controlling case law. Part I introduces the NFPA and franchise law in general. Part II examines the requirements for a franchisee to be protected under the NFPA. Part III explains the protection afforded such businesses that qualify. Finally, Part IV provides guidance to attorneys representing businesses which are heavily reliant on their relationships with manufacturers or suppliers.

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