In This Issue:

- Court Finds Employee’s Wage And Hour Claim Falls Within Arbitration Provision Of Online Employment Application:

A federal court in Illinois found that an arbitration agreement in a franchisor’s online employment application is valid and enforceable, and held that the arbitrator should decide whether the arbitration agreement allows class arbitration. Chatman v. Pizza Hut, Inc., 2013 U.S. Dist. LEXIS 73426 (N.D. Ill. May 23, 2013)....

- Franchisee’s Breach Of Contract And Breach Of Good Faith And Fair Dealing Claims Dismissed In Termination Case:

In Damabeh v. 7-Eleven, Inc., 2013 U.S. Dist. LEXIS 66565 (N.D. Cal. May 8, 2013), a federal court in California dismissed a franchisee’s claims that 7-Eleven breached the express terms of the franchise agreement, breached the implied covenant of good faith and fair dealing, and tortiously interfered with the franchisee’s prospective business advantage when 7-Eleven terminated the franchise agreement instead of repairing damage to the franchisee’s store...

- Court Transfers Employment Action To Franchisor’s Home State:

The Minnesota federal district court recently transferred to the Northern District of Texas a putative collective action against franchisor Jani-King International and two wholly-owned subsidiaries. Von Brugger v. Jani-King of Minn., Inc., 2013 U.S. Dist. LEXIS 74548 (D. Minn. May 28, 2013)...

- Court Finds Personal Jurisdiction Over Franchisee Despite Competing Clauses In Agreements:

When two franchise agreements contained contradictory choice-of-law and forum selection clauses, the United States District Court for the Northern District of Ohio decided that Pennsylvania law should control, but that it had personal jurisdiction over the franchisee and Ohio was the appropriate forum...

- Wisconsin Court Rules That Exculpatory Clauses In Parties’ Contract Do Not Bar Franchisee From Bringing Misrepresentation Claim:

In C&M Hardware v. True Value Co., 2013 Wisc. App. LEXIS 404 (Wisc. Ct. App. May 9, 2013), the appellate court declined to enforce two exculpatory clauses in the parties’ Retail Member Agreement. C&M sued True Value for misrepresentations that were allegedly made to induce C&M to become a franchisee...

- Court Finds That Clear Language In Agreements Disproves Franchisee’s Reasonable Reliance On Franchisor’s Promises:

In Ayu’s Global Tire, LLC v. Big O Tires, LLC, 2013 Cal. App. Unpub. LEXIS 3721 (Cal. Ct. App. May 24, 2013), the California Court of Appeals, applying Colorado law, found that clear and specific language in a Uniform Franchise Offering Circular and franchise agreement undermined a franchisee’s assertion that he reasonably relied on purported precontract misrepresentations and omissions by the franchisor...

- Texas Appeals Court Holds Franchisor Not Entitled To Award Of Fees In Enforcing Noncompete Agreement That Was Reformed:

A franchisor that successfully enforced its franchisees’ covenants against competition was recently prevented by the Texas Court of Appeals from recovering its legal costs of enforcement. Franlink, Inc. v GJSM Unlimited, Inc., 2013 Tex. App. LEXIS 5118 (Tex. Ct. App. Apr. 25, 2013)....

- A Rhode Island Court Rejects Wendy’s Franchisee’s Challenge To The Nearby Development Of A Mcdonald’s Franchise:

In CCF, LLC v. Pimental, 2013 R.I. Super. LEXIS 98 (R.I. Super. Ct. May 24, 2013), a Wendy’s franchisee in East Greenwich, Rhode Island, sued McDonald’s Corporation and a town official challenging the approval of various permits and approvals issued by the local planning board and zoning board that allowed for a McDonald’s drive-through restaurant across from the Wendy’s franchisee’s restaurant....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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