Unjust Enrichment Lawsuit Defense by Corporate Lawyer

The client was the chief executive officer of a Washington DC based franchisor operating a nationwide franchise brand. 

The corporation managed franchise recruitment, brand governance, centralized advertising campaigns, and integrated supply chain logistics, while maintaining long term contractual relationships with multiple franchise operators across several jurisdictions. 

Under the franchise agreements, franchisees paid monthly royalties and advertising contributions calculated under a base formula, while certain operational ratios were adjusted over time through mutual practice and performance based consensus rather than frequent written amendments. 

For several years, the franchisees, including the eventual plaintiff, complied with the same settlement structure without dispute, objection, or reservation of rights.

After the franchise relationship ended, one former franchisee initiated an unjust enrichment lawsuit, alleging that the franchisor had wrongfully retained excessive advertising contributions and royalty payments. 

The plaintiff argued that certain deductions exceeded what was expressly stated in the written franchise agreement and therefore constituted benefits retained without legal justification. 

On this basis, the plaintiff demanded restitution of several years of payments, totaling hundreds of thousands of U.S. Dollars, asserting that the franchisor had obtained a benefit at the plaintiff’s expense without a lawful cause. 

From a litigation risk perspective, such claims required careful handling because unjust enrichment arguments can appear superficially persuasive when plaintiffs isolate individual payment components without analyzing the broader contractual framework.

The corporate lawyer first emphasized that under Washington DC law, an unjust enrichment lawsuit generally cannot succeed where an express or implied contract governs the disputed payments. 

The defense demonstrated that every payment at issue arose directly from the franchise agreement and the operational practices consistently applied during the contractual relationship. 

Because the plaintiff received ongoing brand support, advertising exposure, and logistical services in exchange for the payments, the franchisor’s receipt of funds constituted lawful consideration rather than enrichment without cause. 

Accordingly, the defense argued that the threshold element of “absence of legal justification” was entirely missing.

Next, the corporate lawyer highlighted that the settlement ratios challenged by the plaintiff had been applied uniformly for many years with the plaintiff’s full knowledge and repeated compliance. 

Under Washington DC contract principles, continued performance without objection may support the existence of an implied agreement, even where precise numerical ratios are not restated in writing.

The defense established that the plaintiff voluntarily paid the disputed amounts month after month, benefited from the franchisor’s services, and never asserted breach during the contractual term. 

This factual pattern directly contradicted any claim that the payments were involuntary or unjust.

Finally, the corporate advisory lawyer exposed a fatal inconsistency in the plaintiff’s unjust enrichment lawsuit. 

The plaintiff simultaneously relied on the franchise agreement to define the payment relationship while claiming that the same agreement did not provide a lawful basis for the payments. 

The court was urged to recognize that a party cannot affirm a contract for purposes of claiming restitution while denying its validity to establish unjust enrichment. 

This contradiction undermined the credibility and legal coherence of the plaintiff’s case.

After reviewing the evidence and legal arguments, the Washington DC court concluded that the disputed payments were made pursuant to an existing contractual and operational framework. 

The court found that the franchisor’s receipt of royalties and advertising contributions constituted legitimate compensation for services rendered, not unjust enrichment.

It further determined that the plaintiff’s long term acquiescence to the settlement structure precluded any post termination claim of unlawful retention. 

On this basis, the court dismissed the unjust enrichment lawsuit in its entirety, denying all restitution claims.

This case underscores that in Washington DC, unjust enrichment lawsuits cannot be used to retroactively rewrite unfavorable contracts or business outcomes. 

For franchisors and other corporate entities, the decision reaffirms that consistent operational practices, when accepted over time, carry substantial legal weight. 

The outcome also illustrates the importance of engaging an experienced corporate advisory lawyer who can align factual performance history with restitution doctrine to defeat improperly framed unjust enrichment claims.