Opinion ID: 1254932
Heading Depth: 2
Heading Rank: 2

Heading: Product Price Mark-Up

Text: A price mark-up on goods above a bona fide wholesale price may constitute an indirect franchise fee. Cambee's Furniture, Inc. v. Doughboy Recreational, Inc., 825 F.2d 167, 171 (8th Cir.1987) (interpreting South Dakota's franchise regulation, which is substantially similar to the MFA); Upper Midwest, 577 N.W.2d at 242; OT Indus., Inc. v. OT-tehdas Oy Santasalo-Sohlberg Ab, 346 N.W.2d 162, 166 (Minn.Ct.App.1984). The question of whether the mark-up is a bona fide wholesale price or an indirect franchise fee is a fact-specific inquiry. The district court found the CA Product mark-up is not an indirect franchise fee; rather, the mark-up merely represented CA's profits on the Products, i.e. a bona fide wholesale price. Coyne argues the court was incorrect because it is illogical to assume that all of the rights granted to Coyne under the Agreementsuch as the license to use the Trademarks, the limitation on CA's right to compete with Coyne in the Territory, and CA's obligation to pay a substantial termination feeare merely in consideration for Coyne's payment of a bona fide wholesale price for CA products. This argument, however, falls short of demonstrating the district court's factual finding is clearly erroneous. See Commc'n Maint., Inc. v. Motorola, Inc., 761 F.2d 1202, 1206-07 (7th Cir.1985) (holding that mark-up retained by alleged franchisor was not an indirect franchise fee under Indiana's franchise regulation); Corporate Res., Inc. v. Eagle Hardware & Garden, Inc., 115 Wash.App. 343, 62 P.3d 544, 548 (2003) (holding that profit margins on installation contracts was not an indirect franchise fee under Washington's franchise regulation). Therefore, the Court will not disturb the district court's finding on appeal.