Patel v. 7-Eleven, a case in Massachusetts, has been closely watched since the ABC test took hold of franchise relationships in employee misclassification cases across the country.
A putative class of 7-Eleven franchisees...more
3/31/2022
/ 7-Eleven ,
ABC Test ,
Disclosure Requirements ,
Franchisee ,
Franchises ,
Franchisors ,
FTC Franchise Rule ,
Hiring & Firing ,
Independent Contractors ,
MA Supreme Judicial Court ,
Misclassification ,
Preemption ,
Putative Class Actions ,
Right to Control
A California federal court denied Mountain Mike’s Pizza a temporary restraining order (“TRO”) against one of its franchisees who did not renew its franchise agreement and opened a new restaurant under a different name.
In...more
A federal court in Virginia denied tax franchisor, Liberty Tax’s, motion to dismiss complaints by two of its area developers (“ADs”). The ADs claimed Liberty Tax breached their contract for wrongfully terminating, failing to...more
2/28/2022
/ Breach of Contract ,
Contract Disputes ,
Contract Drafting ,
Contract Renewal ,
Contract Termination ,
Contract Terms ,
Development Agreements ,
Failure To Pay ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Motion to Dismiss ,
Royalties ,
Wrongful Termination
A federal appellate court declined to enforce a choice-of-forum clause finding enforcement would conflict with Michigan’s Franchise Investment Law (“MFIL”).
Lakeside Surfaces, Inc., a maker of stone countertops, sued...more
A Texas appeals court affirmed a lower court judgment in favor of Pizza Hut and its franchisee for claims of an alleged sexual assault by a delivery driver. The appellate court held Pizza Hut was not liable for the...more
An Indiana federal court granted hamburger and milkshake franchisor, Steak n Shake, a temporary restraining order (“TRO”) against a franchisee to enforce post-termination obligations under franchise and area development...more
A Georgia district court declined to dismiss a breach of contract case by a hotel franchisor against a franchisee. The court rejected the franchisee’s argument that the franchisor waived its rights under the parties’ license...more
A franchisee sued its franchisor, OsteoStrong Franchising, LLC, in Texas federal court after OsteoStrong terminated the franchise and development agreements. Termination occurred after the franchisee failed to timely develop...more
A hotel franchisee brought a class action lawsuit in Louisiana federal court on behalf of Louisiana franchisees. The franchisor moved to transfer the action to Georgia, based on the mandatory forum selection clause in the...more
Past and present franchisees of commercial cleaning service franchisor, Jani-King, brought claims for violation of Connecticut minimum wage and anti-kickback laws, and unjust enrichment. They claimed Jani-King misclassified...more
11/1/2021
/ Appeals ,
Dismissals ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Independent Contractors ,
Minimum Wage ,
Misclassification ,
Service Agreements ,
Summary Judgment ,
Unjust Enrichment ,
Wage and Hour
In 2017, four former franchisees brought a class action in California, claiming 7-Eleven owed them unreimbursed expenses. The ex-franchisees claimed they were employees, not independent contractors of 7-Eleven. The court...more
A San Francisco franchisee of the It’s Just Lunch matchmaking system received an offer to buy the franchised business for about $146,000 with the final price to be determined. Under the offer, the actual purchase price would...more
An area developer entered into three agreements with a pizza franchisor and developed 50 franchises in Texas. The franchisor, Pizza Inn, Inc., tried to terminate all three contracts, though each had a twenty-year initial term...more
A federal court in New Hampshire found a multi-unit operator of five Planet Fitness gyms plausibly alleged the franchisor interfered with its business relationships and denied Planet Fitness’ motion for judgment on the...more
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
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
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
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
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
6/30/2021
/ Breach of Contract ,
Contract Termination ,
Counterclaims ,
Covenant of Good Faith and Fair Dealing ,
Failure To Pay ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Implied Covenants ,
Lowe's ,
Royalties ,
TRO
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
6/1/2021
/ Breach of Contract ,
Civil Liability ,
Criminal Liability ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Injunctive Relief ,
Irreparable Harm ,
Medical Devices ,
Preliminary Injunctions
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
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
4/30/2021
/ Bodily Injury ,
Commercial General Liability Policies ,
Coronavirus/COVID-19 ,
Damages ,
Duty to Defend ,
Franchisee ,
Franchisors ,
Health and Safety ,
Injunctions ,
Insurance Claims ,
Insurance Industry ,
McDonalds ,
Negligence ,
Public Nuisance
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
4/29/2021
/ Article III ,
Choice-of-Law ,
Dismissals ,
Forum Selection ,
Franchise Acts ,
Franchise Agreements ,
Franchisors ,
Goods or Services ,
Sherman Act ,
Standing ,
Successor Interests
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
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