Unanimous Appellate Win for Whataburger
June 27, 2017 Case Study
Whataburger Inc., v. Whataburger of Alice Ltd.
This case involved a dispute over the interpretation of a settlement agreement between Whataburger, Inc. and one of its franchisees (Whataburger of Alice, Ltd.). Although the underlying franchise agreements all provide for an expiration date, the franchisee claimed the right to keep renewing them every time they expire – with no time limit whatsoever. The franchisee also claimed to be the beneficiary of fiduciary-type duties. A San Antonio trial judge agreed with the franchisee, so Whataburger appealed.
The San Antonio Court of Appeals disagreed and reversed both those rulings. In a unanimous opinion, the appellate court held that the franchisee cannot automatically renew expired franchise agreements and that Whataburger does not owe the franchisee any heightened duties. Beck Redden partner David M. Gunn argued the appeal and collaborated on the briefing with his colleague John Adcock, who also works in the Beck Redden appellate section.