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Franchisor 101: Competing With a Non-Compete Covenant?

A federal court in Louisiana granted a preliminary injunction against a former franchisee of Liberty Tax Service for breaching post-termination covenants under a franchise agreement. Liberty Tax entered into franchise...more

Franchisee 101: Franchisor’s Impact Study Fails to Influence Court

A federal district court denied KFC’s defensive summary judgment motion, enabling its franchisee to go to trial on claims against KFC for breach of the implied covenant of good faith and fair dealing by opening a competing...more

Franchisor 101: My Dog Ate My Franchise Agreement

A Louisiana appellate court affirmed a trial court’s finding that there was a signed franchise agreement between the parties even though the franchisor could not produce the signed original. Brooke and Michael Hyde decided...more

Franchisee 101: Real Estate Amendment Not Up to Interpretation

A franchisee sued real estate franchisor Century 21 for a declaration whether the franchisee could end its franchise agreement early despite a provision that deleted the franchisee’s early termination right. Noting the...more

Franchisor 101: Defaults Sink Bathroom Remodel Franchisee

On competing motions for a temporary restraining order (“TRO”) by ReBath – a nationwide bathroom remodeling franchisor, and its terminated franchisee, ReBath prevailed in restraining the ex-franchisee’s further operations. A...more

Franchisee 101: Bad to the Bone

A group of franchisees sued OsteoStrong, a franchisor of bone density improvement centers. They claimed omissions in the FDD about bankruptcies and lawsuits, and misrepresentations of patent rights to equipment and...more

Franchisor 101: Can’t Break the Broker

A Minnesota federal court ruled in favor of a franchise broker on summary judgment. The court dismissed misrepresentation claims brought by a military veteran who alleged unlawful inducement to invest in a failed kickboxing...more

Franchisee 101: McDonald’s Cooks Up COVID-19 Insurance Coverage

An insurance coverage case brought by McDonald’s and two of its franchisees (collectively, “McDonald’s”), raised a novel question in Illinois state court. The question was whether or not costs to comply with a mandatory...more

Franchisor 101: Successor Franchisor’s Territorial Takeover

A federal court in Connecticut ruled against an urgent care franchisor’s motion to dismiss, finding the plaintiff had standing to sue under Article III of the U.S. Constitution. The court still dismissed the plaintiff’s...more

Franchisee 101: No Legal Cure for Serial Defaults

A federal court in Michigan granted 7-Eleven’s motion for summary judgment, enforcing the franchisor’s right to terminate a franchisee with repeated defaults, even though each default had been cured. 7-Eleven’s franchise...more

Franchisor 101: Is Matco the Next Jan-Pro?

A federal court in California certified a class of Matco Tools franchisees who claimed to be misclassified by Matco as independent contractors rather than employees. They claimed Matco did this to avoid obligations owed to...more

Franchisee 101: Convenience Store Pays for Inconvenient Ordinance

A federal court in New Jersey denied a 7-Eleven franchisee’s motion for a temporary restraining order. The franchisee sought an order enjoining 7-Eleven from enforcing various franchise agreement provisions, including charges...more

Franchisor 101: Court Delivers Pizza Franchisor Liquidated Damages

The Sixth Circuit Court of Appeals recently affirmed a $2.6 million award of liquidated damages in favor of a pizza franchisor and a summary judgment order enforcing termination of franchise agreements due to nonpayment and...more

Franchisee 101: No Excuse for Late Notice

The U.S. Court of Appeals for the Fifth Circuit reversed a trial court judgment against a Texas franchisor, finding the lower court erred in excusing an untimely renewal notice of area development agreements. The Court held a...more

Franchisor 101: California’s Dynamex/ABC Test is Retroactive

In 2019, the U.S. Court of Appeals for the Ninth Circuit held that the ABC Test announced in a California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018) could apply to franchise...more

IP Gets “Modernized” In Stimulus Bill

Embedded within the 5,600-page Consolidated Appropriations Act, 2021 – more commonly known as the $2.3 trillion Coronavirus Relief Stimulus Bill enacted on December 27, 2020 – are significant changes to federal trademark and...more

Franchisee 101: Shelf the Self-Help

Lola Salamah and Amro Elsayed signed a franchise agreement with M.M. Fowler, Inc., the franchisor of Family Fare gas stations, to operate a gas station franchise in North Carolina. A few years into the franchise...more

Franchisor 101: AB 5’s Preemptive Strike

Franchisors faced unprecedented challenges in 2020. Enactment of California’s Assembly Bill 5 on January 1, 2020 was just the tip of an iceberg. As the COVID-19 pandemic upended franchise systems across all industries,...more

Franchisee 101: Fitness Franchisee Exercises Poor Judgment

A federal court in Denver granted Fitness Together Franchise, LLC a preliminary injunction against the owner of three former franchisees, three former franchisee entities and three additional entities formed to operate a...more

Franchisor 101: Court Remediates Damage to Restoration Franchisor

A federal court in Nashville granted summary judgment on breach of contract claims in favor of a damage restoration franchisor’s lawsuit with a former California franchisee. A Servpro franchisee had a territory in Los...more

Franchisee 101: COVID Defense Leads to Contempt

A federal court in Tennessee held a Gus’s World Famous Fried Chicken former franchisee in contempt for failure to deidentify its restaurant after entry of a temporary restraining order and consent to a permanent...more

Franchisor 101: (Non)Competing for Care

A U.S. Court of Appeals upheld a federal district court decision partly granting a preliminary injunction sought by a companionship and domestic care services franchisor against a former franchisee, for violating the...more

Franchisee 101: Trashing the Competition

In a misappropriation of trade secrets action, a franchisor sued a prospective franchisee, claiming breach of a non-disclosure agreement ("NDA") by operating a competing business. The prospective franchisee signed the NDA...more

Franchisor 101: New Joint Employer Rule Nixed for Now

In another twist to the joint employer saga, a United States District Court in New York voided the Department of Labor’s (“DOL”) new rule for joint employment. Eighteen (18) states and the District of Columbia brought a...more

Franchisee 101: They Were Just Kidding

A federal district court in Baltimore granted summary judgment against a former franchisee who claimed negligent misrepresentation against the franchisor and its officers. The court found there was no genuine issue of...more

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