I. Introduction.
For most manufacturers and franchisors, their distribution and franchise agreements were drafted at a time when the worldwide effects of the Covid-19 pandemic and the pressures it placed on the global supply chain and the labor pool were not even on the horizon. Faced with supply chain bottlenecks, lack of products in showrooms and stores, and a robust workforce through which their distributors and franchisees can sell their products or deliver their services, manufacturers and franchisors are facing tough challenges in addressing the fallout and its impact on their dealer networks and franchise systems. Distributors and franchisees are seeking unprecedented concessions and manufacturers and franchisors are carefully weighing these requests. As they do so, manufacturers and franchisors should be mindful that when “one size fits all” fixes are not advisable or required, they can inadvertently expose themselves to charges of selective enforcement or disparate treatment from their distributors and franchisees. What follows is a brief overview of some of the circumstances under such claims occur and what manufacturers and franchisors can do to prevent them.