Legacy Academy, Inc.v.Pacu Enterprises, Inc.
Legacy Academy, a childcare-center franchisor, sued a franchisee for unpaid royalties and advertising fees. A jury awarded Legacy two hundred seventy thousand dollars in lost royalties but nothing for advertising fees. The trial court entered judgment for the royalties and denied Legacy’s request to take the advertising-fee issue from the jury. The Court of Appeals held that the evidence demanded a verdict for Legacy on that claim and that the trial court erred by allowing the jury to decide it. The majority also addressed the franchisee’s defenses, while a dissent maintained that factual questions remained on advertising fees, prior material breach, and mitigation. The decision reversed the judgment in part and required further proceedings concerning the fee-related damages and defenses. It is notable for the interaction between franchise-contract provisions, directed verdict standards, and the division of fact-finding authority between judge and jury.
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