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Seventh Circuit Holds Footlong Settlement Falls Short

The Seventh Circuit’s rejection of a class action settlement in a case alleging consumer fraud against Subway for allegedly “shorting” customers of its Footlong sandwiches illustrates the pitfalls of settlements that provide...more

California Courts Continue to Void Forum Selection Clauses in Franchise Agreements Under a Questionable Mutual Assent Theory

by Mulcahy LLP on

The Ninth Circuit and California Court of Appeal generally continue to render forum selection clauses in franchise agreements unenforceable. This has been a hot topic among franchise litigators and on our blog....more

Franchise Litigation Rising Over Dietary Considerations

by Lewitt Hackman on

Rising concerns over food sourcing and preparation is leading to more and more litigation for restaurants and franchises. Most of the lawsuits claim discrimination, which makes sense as many dietary strictures are rooted...more

FRANCHISOR 101: Selective Enforcement of Franchise Agreement Provisions

by Lewitt Hackman on

A franchisor's ability to set renewal terms can bind franchisees to terms in a later franchise agreement before the renewal agreement even exists. In a recent case, a franchisor could enforce a hypothetical non-compete...more

Un-Vacated: Nevada Supreme Court Confirms $6.7M Franchise Arbitration Award

In a decision that is very skinny on the facts, a unanimous Nevada Supreme Court recently un-vacated a significant arbitration award in a dispute over dental franchises. In Half Dental Franchise, LLC v. Houchin, 2017 WL...more

Navigating The Private Right Of Action Under The California Franchise Investment Law

by Mulcahy LLP on

The California Franchise Investment Law (“CFIL”) regulates both the sale and disclosure of franchise opportunities within the state. The law was enacted to “provide each prospective franchisee with the information necessary...more

License to Sue? Court Rules That a Motor Vehicle Dealer Does Not Need a Dealer’s License to Bring a Statutory Claim for...

by Mulcahy LLP on

California’s motor vehicle code allows dealers to bring suit against manufacturers for terminating the dealer without good cause. See California Vehicle Code §§ 11713.3, 3060, 3061 and 3066. As currently written, the...more

Is Everything “Settled” In Your Settlement Agreement? Not Quite!

by Fox Rothschild LLP on

A recent case involving the Whataburger franchise system reminds franchisors of the importance of the use of iron-clad language when granting future development rights. In Whataburger, Inc. et. al. (“Whataburger”) v....more

Joint Amicus Brief Filed to Protect Franchise Business Model - BB&K’s Thomas O’Connell Counsel of Record

by Best Best & Krieger LLP on

Best Best & Krieger LLP attorneys Thomas O’Connell, as counsel of record, and Roger Crawford recently submitted an amicus curiae brief to the U.S. Supreme Court on behalf of the International Franchise Association, American...more

FRANCHISEE 101: McDonald's Shaking Damages for OT Policy

by Lewitt Hackman on

In Los Angeles Superior Court, McDonald's claimed victory when 6,600 workers seeking $41 million in back pay and penalties came away with less than 2% of the amount sought in a claim that the fast-food giant cheated them out...more

FRANCHISOR 101: Donut Franchise Relationship Dissected by Court

by Lewitt Hackman on

The parent of Dunkin' Donuts was named along with Starbucks and about 80 other coffee sellers, distributors and retailers in a 2010 lawsuit alleging violations of California's Proposition 65 and Safe Drinking Water and Toxic...more

Shifting Sands Continue to Undermine Traditional Definitions of Employment

On June 7, 2017, the Wage and Hour Division of the United States Department of Labor withdrew two Administrator’s Interpretations issued during the Obama administration that took a broad view of the employment relationship...more

Appellate Court Notes

by Pullman & Comley, LLC on

Supreme Court Advance Release Opinions: - SC19799 - Middlebury v. Connecticut Siting Council Neighbors unsuccessfully challenged the modification of an approval for a new power plant before the Siting Council claiming...more

Food & Beverage Litigation Update | June 2017 #3

FDA Delays Compliance Date for Nutrition Facts Labeling - The U.S. Food and Drug Administration (FDA) has announced that it will postpone the deadline for food companies to use a revised Nutrition Facts label on packaged...more

Putative Class and Collective Action Under Enjoined U.S. DOL Overtime Rule Appears to Face Strong Argument for Dismissal

by Littler on

On June 7, 2107, a plaintiff brought a putative class and collective action against Chipotle for alleged violations of the Fair Labor Standards Act and New Jersey’s Wage and Hour Law. The plaintiff asserts the company...more

Franchisors, Got Claims? Don't Let Them Spoil Like Bad Cheese

by Lewitt Hackman on

This is the tale of two restaurants, each facing trademark infringement claims under the Lanham Act brought by two, separate franchisors. The franchisees’ restaurants had three things in common: First, cheese is a key...more

FRANCHISEE 101: Special Delivery

by Lewitt Hackman on

For a relationship to meet the legal definition of a "franchise" in some jurisdictions, the franchisor must give significant assistance to, or have significant control over, the franchisee's business. A franchisor's...more

Tesla “Franchisee” Thwarted in Utah

by Fox Rothschild LLP on

Tesla, the electric vehicle automaker, recently lost a round in the Supreme Court of Utah. Tesla set up a wholly-owned subsidiary called “Tesla UT” that was to hold a license to sell Tesla’s cars to the public. The Utah...more

Sheppard Mullin Secures Major Victory for Chipotle in Nationwide Misclassification Action By Demonstrating Variations Among...

The Court’s opinion in Scott v. Chipotle Mexican Grill demonstrates how employers can successfully combat class action claims that employees were misclassified as exempt. The successful defense of the class certification...more

McDonald’s Corp. Dismissed from Suit Over Wage Violations at Franchises - Ostensible Agency Theory Rejected by Court

by Best Best & Krieger LLP on

A class action attempt to establish joint employer liability between franchisor McDonald’s Corporation and its franchisee for allegedly unpaid wages through an ostensible agency theory was brought to an end recently by a...more

FACTA Suits Still Bite - $31 Million Subway Class Action Settlement Approved

Ten years ago, hundreds of retailers, chain restaurants and others were targeted nationwide as defendants in class action suits under the Fair and Accurate Credit Transactions Act (FACTA) for violating the so-called...more

New York Court Delivers Denial Of Certification In Papa John’s Drivers’ Class Action

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A New York federal court in Durling, et al. v. Papa John’s International, Inc., Case No. 7:16-CV-03592 (CS) (JCM) (S.D.N.Y. Mar. 29, 2017), recently denied Plaintiffs’ motion for conditional certification...more

Federal Court Serves Up Satisfying Seconds For California Franchisors: No Ostensible Agency Liability For Franchisees’ Alleged...

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A federal court in California recently held that a franchisor cannot be held liable for labor code claims where it did not exercise control directly, or through an actual agency relationship with the...more

Court Finds That Arbitration Award That Interpreted Contract “Termination” To Include Contract “Expiration” Was Not A “Manifest...

by Carlton Fields on

Former franchisees filed a petition to vacate an arbitration award entered in favor of their former franchisor which enforced a 2-year non-compete provision in the parties’ franchise agreement when the agreement expired. The...more

Superior Court of Québec Confirms Validity of Percentage Royalties Paid by Pharmacist-Owners to Franchisor

The Superior Court of Québec (Court), presided by Justice M. Monast, recently ruled on an important point of contention for franchise pharmacies, by confirming the validity of a percentage royalty clause contained in a...more

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