News & Analysis as of September 21, 2024

Franchisors

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Non-Compete Agreements are contracts, typically formed in employment or business purchase contexts, where one party agrees to refrain from engaging in a particular line of work or pursuing business within a certain industry or locale. The purpose of these agreements is to protect employers or business purchasers from competition stemming from former employees or former owners of a business. less -

Michigan Federal Court Grants Franchisor’s Motion for Preliminary Injunction Against Former Restoration Service Franchisee

Lathrop GPM on 9/16/2024

A federal court in Michigan has granted a franchisor’s motion for preliminary injunction against former franchisees for violating the franchise agreements’ post-termination noncompete provisions. 1-800 Water Damage Int’l LLC...more

New Jersey Federal Court Partially Enforces Noncompete Covenant Against Former Franchisee

Lathrop GPM on 5/10/2024

A federal court in New Jersey recently granted a franchisor’s motion for a preliminary injunction, enjoining the former franchisee from using the franchisor’s marks and violating the franchise agreement’s noncompete clause,...more

Franchisor 101: A Tinted FDD

Lewitt Hackman on 4/1/2024

A Tennessee federal district court granted a franchisee’s request for a preliminary injunction to prevent the franchisor from enforcing noncompete restrictions under the franchise agreement while the franchisee litigated its...more

Georgia Court Finds Hooter’s Franchise Non-Compete Unreasonable in Geographic Scope

Fox Rothschild LLP on 3/26/2024

A district court in Georgia recently granted a Motion for Preliminary Injunction filed by HOA Franchising, LLC’s, the franchisor of the Hooters restaurant chain (“Hooters”), against one of its former restaurant franchisees,...more

Arizona Federal Court Grants Temporary Restraining Order and Preliminary Injunction Against Former Franchisee for Violation of...

Lathrop GPM on 2/19/2024

A federal court in Arizona recently granted franchisor LeTip World Franchise’s motion to temporarily restrain and preliminarily enjoin a former franchisee from operating a competing business. LeTip World Franchise, LLC v....more

Franchisee 101: Blown Dry by the Competition

Lewitt Hackman on 9/1/2023

A Minnesota bankruptcy court granted Fantastic Sams a preliminary injunction against a former Fantastic Sams franchisee, finding the operation of four new hair salons by the former franchisee was prohibited by enforceable...more

Franchisee 101: Blurry Choice of Remedies

Lewitt Hackman on 8/2/2023

A Texas federal court denied a franchisor’s request to enjoin operations of a former franchisee’s competing optical retail stores for failure to establish likelihood of success on a claim of trade dress infringement. The...more

Tennessee Federal Court Compels Arbitration in Fraudulent Inducement Case and Grants Preliminary Injunction Enjoining Enforcement...

Lathrop GPM on 6/13/2023

A federal court in Tennessee granted franchisor Frost Shades’ motion to compel arbitration of franchisee Lunt’s fraudulent inducement of contract claims, but the court also granted in part franchisee Lunt’s request for a...more

LADR Case Notes (August 2022-October 2022) and FLJ Currents (Winter 2023)

Bradley Arant Boult Cummings LLP on 6/12/2023

A gym franchisor recently secured a preliminary injunction against its former franchisee prohibiting the franchisee from operating an independent gym on the same location and using the franchisor’s trade secrets. Chris...more

Franchisee 101: Court Taxes Franchisor’s Restrictive Covenants

Lewitt Hackman on 6/2/2023

The Second Circuit Court of Appeals affirmed a district court’s order denying a franchisor’s request for preliminary injunction against a terminated franchisee to enforce covenants not to compete or solicit former clients....more

Franchisor 101: No Repairing Delayed Filing

Lewitt Hackman on 11/29/2022

A New Jersey federal court denied a franchisor’s motion for preliminary injunction against a franchisee due to franchisor’s 11 month delay in bringing the motion. Franchisee entered into two franchise agreements with H-1 Auto...more

Franchisee 101: Caught Between a Rock and Renewal

Lewitt Hackman on 10/31/2022

A federal court denied a franchisee’s motion for a temporary restraining order and preliminary injunction in a dispute over renewal of a franchise agreement to provide home care services with HCAF....more

Franchisee 101: The Small Business on Main Street

Lewitt Hackman on 6/1/2022

A federal district court denied a motion for preliminary injunction brought by pizza franchisor, Breadeaux’s Pisa, LLC, seeking to stop a former franchisee from operating a competing pizza business. The franchise agreement...more

Franchisor 101: Competing With a Non-Compete Covenant?

Lewitt Hackman on 8/31/2021

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

The Franchise Memorandum - Issue # 266

Lathrop GPM on 6/4/2021

Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Post-Termination Injunction: Noncompete Covenants - California Federal Court Enforces...more

Franchisee 101: Fitness Franchisee Exercises Poor Judgment

Lewitt Hackman on 11/25/2020

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: (Non)Competing for Care

Lewitt Hackman on 10/30/2020

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: Successor Slips Out of Non-Compete

Lewitt Hackman on 8/4/2020

A Florida federal court granted a preliminary injunction against a terminated franchisee. The court enjoined the ex-franchisee from using the franchisor’s trademarks and trade dress. The court enforced the franchisor’s...more

FRANCHISOR 101: Not at Liberty to Compete

Lewitt Hackman on 5/1/2020

A federal district court in Michigan granted a preliminary injunction in favor of tax preparation franchisor, Liberty Tax Service (JTH Tax, Inc. v. Magnotte, E.D. Mich., ¶16,575), finding it was likely to succeed on its...more

FRANCHISEE 101: Your Neighborhood Inspector

Lewitt Hackman on 8/27/2018

A Tennessee federal judge granted a preliminary injunction in favor of AmeriSpec, a national franchisor of property inspection services, enforcing a one-year post-termination covenant not to compete against its former...more

Franchisors Must Act Quickly to Obtain Injunctive Relief on Non-Competition Covenants

Baker Donelson on 10/11/2013

A recent case from the United States Court of Appeals for the Eighth Circuit reaffirms the important principle that a franchisor, or any business, that seeks a preliminary injunction to prevent harm from a covenant breach...more

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