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Is Franchising Doomed?
Strategies for Negotiating with a Franchisee and Franchisor
Before committing to a franchise business, consider...
In June of 2022, McDonald’s obtained a judgment on the pleadings, ending antitrust litigation challenging the legality of the no-hire restraints it previously included in its franchise agreements. More than a year later, the...more
In an important case of first impression that drew amicus participation from the Department of Justice, the Federal Trade Commission, and the International Franchise Association, the Seventh Circuit reversed a judgment in...more
In Deslandes v. McDonald’s USA LLC, issued August 25, 2023, the U.S. Court of Appeals for the Seventh Circuit overturned the dismissal of antitrust claims that challenged no-poach clauses in franchise agreements....more
In June 2021, the Supreme Court reaffirmed in NCAA v. Alston that antitrust claims under Section 1 of the Sherman Act “presumptively” call for rule-of-reason analysis and that only the rare case merits “quick look” or per se...more
For the past few years, it seems franchisors have been riding a roller coaster when it comes to no-poach clauses in their franchise agreements. While for a time it seemed as though scrutiny for such clauses might be fading,...more
Two Illinois Federal Courts Deny Class Certification in Anti-Poaching Class Actions Against Franchisors - Two federal courts in Illinois have rejected motions to certify classes of employees who worked in franchised...more
Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Fifth Circuit Reverses Trial Court’s Excusal of Area Representative’s Tardy Renewal Notice -...more
Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Since December 1997, The GPMemorandum has been presenting summaries of recent legal developments of interest to franchisors and companies...more
Over the last 18 months, no-poach provisions in franchise agreements have drawn considerable attention from academics, state attorneys general, politicians, and the class action plaintiffs’ bar. Originally published in...more
Lauded as one of the most important franchise cases in the recent past, Patterson v. Domino’s established a new standard for addressing vicarious liability issues in California. In reaching its decision that Domino’s was not...more
The U.S. Department of Labor says McDonald's is liable for actions of franchisees. In the last three months a California federal court said McDonald's could be liable for a franchisee's alleged failure to pay overtime and...more
The National Labor Relations Board continues the string of controversial moves in its unfair labor practice cases against McDonald’s. In December 2014, the NLRB’s General Counsel filed thirteen complaints naming the...more
Franchisors in Tennessee can breathe a small sigh of relief thanks to a newly enacted state statute that seeks to limit their potential liability and strike back at the general counsel of the National Labor Relations Board....more
The concept of joint-employer liability is popping up in the news a lot again. This is because the NLRB is taking a more aggressive view on joint-employer standards under the National Labor Relations Act, particularly as to...more
The Office of the General Counsel of the National Labor Relations Board (NLRB) issued 13 complaints, on December 19, 2014, against McDonald’s franchisees and their franchisor, McDonald’s USA, LLC (McDonald’s USA), involving...more
2014 – First NLRB Shots Against the Franchise Model. The National Labor Relations Board (NLRB) is considering revising its long-established joint employer test, a change which may threaten the current franchise model....more
Last month, the National Labor Relations Board’s general counsel gave notice of its intent to jointly pursue unfair labor practice charges against McDonald’s USA and its various franchisees. Like most franchisor/franchisee...more
The National Labor Relations Board’s (“NLRB”) General Counsel’s Office has again signaled its commitment to expanding the scope of the current test for joint employment. In a move that could have implications for a broad...more
On December 19, the National Labor Relations Board (NLRB) issued 13 complaints naming McDonalds as a “joint employer” of the employees at its franchisees....more
On December 19, 2014, the National Labor Relations Board's (NLRB) Office of General Counsel took another step forward in its effort to erase the line between franchisors and franchisees. In a controversial move, the Office of...more
In July 2014, the National Labor Relations Board (NLRB) took the unexpected step of authorizing complaints against McDonald's USA, LLC and some of its franchisees for the franchisees' responses to employee protests. The Board...more
Last week, the National Labor Relations Board’s general counsel announced its position that McDonald’s Corporation can be considered a joint employer with its franchisees for purposes of unfair labor practice claims. This...more
This edition of our Franchising Update includes the following articles: - The recently announced review of the Franchising Code. - The Pie Face dispute – misleading information or inadequate due diligence. ...more