A federal district court upheld an arbitration panel’s decision to deny attorneys’ fees to Benihana, even though Benihana won a dispute with its licensee. The licensee started arbitration claiming Benihana breached the...more
3/29/2019
/ Appeals ,
Arbitration ,
Arbitration Awards ,
Attorney's Fees ,
Breach of Contract ,
Contract Termination ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Good Cause ,
License Agreements ,
Licensees ,
Prevailing Party ,
Reaffirmation ,
Restaurant Industry
The wheels of government turn slowly to the detriment of copyright owners, according to a unanimous opinion delivered by U.S. Supreme Court Justice Ruth Bader Ginsberg, in Fourth Estate Public Benefit Corporation v....more
3/7/2019
/ Appeals ,
Copyright ,
Copyright Exhaustion ,
Copyright Infringement ,
Copyright Registration ,
Damages ,
Fourth Estate Public Benefit Corp v Wall-Street.com LLC ,
Petition for Writ of Certiorari ,
SCOTUS ,
Solicitor General ,
Split of Authority ,
The Copyright Act ,
Uniformity
Employees of a Merry Maids home cleaning franchise brought a class action against the franchisee, the franchisor, its owner and affiliated entities claiming they were joint employers. A California federal district court...more
3/2/2019
/ Agency Relationship ,
Class Action ,
Employee Handbooks ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Genuine Issue of Material Fact ,
Joint Employers ,
Labor Law Violations ,
Minimum Wage ,
Reasonable Belief Test ,
Right to Control ,
State Labor Laws ,
Summary Judgment ,
Unpaid Overtime ,
Unpaid Wages ,
Wage and Hour
Hot dog franchisor, Charlie Graingers, was unable to obtain dismissal of a federal lawsuit brought by franchisees alleging fraud, misrepresentation and breach of fiduciary duty....more
2/28/2019
/ Breach of Duty ,
Federal Trade Commission (FTC) ,
Fiduciary Duty ,
Franchise Agreements ,
Franchise Disclosure Document ,
Franchisee ,
Franchisors ,
Fraud ,
Misrepresentation ,
Motion to Dismiss ,
Release Agreements
Sandwich shop franchisor Erbert and Gerbert (“E&G”) was unable to demonstrate a “better than negligible” likelihood of succeeding on allegations that a former franchisee infringed its trade dress in establishing a new...more
A Wisconsin federal judge granted summary judgment in favor of a food service and cleaning equipment maker (“Stoelting”), ruling that minimum purchase requirements under two dealer agreements were not a franchise fee under...more
1/31/2019
/ Contract Termination ,
Dealerships ,
Franchise Agreements ,
Franchise Fees ,
Franchise Termination ,
Franchises ,
Good Cause ,
Manufacturers ,
Minimum Purchase Requirements ,
Purchase Agreement ,
Summary Judgment ,
Wholesale ,
Written Notice
An ex-franchisee of a vehicle transportation and shipping management franchise was enjoined by a federal court, for two years, from operating a competitive business at its former location in Virginia or anywhere the...more
A bankruptcy court has found that Applebee’s failed to properly terminate its franchise agreements prior to the franchisee petitioning for bankruptcy. Therefore, the franchise agreements remained in effect and were property...more
12/28/2018
/ Applebee's ,
Commercial Bankruptcy ,
Contract Termination ,
Contract Terms ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Notice of Default ,
Right To Cure ,
Royalties
When you pay your phone bill, part of the taxes go into a fund used by the government to subsidize cell phone service to qualifying individuals, under federal and state Lifeline programs. Phones typically reach the end...more
12/3/2018
/ Arbitration ,
Arbitration Awards ,
Attorney's Fees ,
Cell Phones ,
Contract Termination ,
Dealerships ,
Fee-Shifting ,
Franchise Agreements ,
Franchise Fees ,
Franchisee ,
Franchisors ,
IP License ,
Lifeline Program
Most franchisors’ annual franchise registration renewal deadlines are a few months away. Nevertheless, franchisors should contact their accountants now regarding a new revenue recognition rule issued by the Financial...more
11/30/2018
/ Accountants ,
FASB ,
Financial Reporting ,
Franchise Agreements ,
Franchise Fees ,
Franchisee ,
Franchises ,
Franchisors ,
IP License ,
Registration Requirement ,
Training
A state appellate court (“Court”) in New Mexico upheld a decision by the state’s Taxation and Revenue Department (“Department”) that royalties paid to out-of-state franchisors are subject to the state’s gross receipts tax...more
A federal Appeals Court has held that an offer to extend a franchisee’s buyback period lacked consideration required to form an enforceable contract and, instead, was an unenforceable gratuitous promise by the franchisor....more
An ice cream parlor franchisor in Ohio, Handel Enterprises, Inc., must defend claims that it violated the California Franchise Investment Law (CFIL) for failing to disclose its amended franchise disclosure document (FDD) to a...more
Jimmy John’s will face antitrust claims, after an Illinois federal judge declined to dismiss allegations in a class action.
Plaintiffs claim the chain’s franchise agreement harmed competition by preventing franchisee...more
9/28/2018
/ Anti-Competitive ,
Antitrust Violations ,
Class Action ,
Enforcement Actions ,
Franchisee ,
Franchises ,
Franchisors ,
Motion to Dismiss ,
No-Hire/No-Solicitation Agreements ,
No-Poaching ,
Non-Compete Agreements ,
Restaurant Industry ,
State Attorneys General
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
The Ninth Circuit Court of Appeals upheld summary judgment in favor of Taco Bell on class claims that employees should be paid under California law for time spent on company premises eating employer-discounted meals during...more
8/24/2018
/ Appeals ,
Class Action ,
Employment Policies ,
Franchisee ,
Franchises ,
Reaffirmation ,
Rest and Meal Break ,
State Labor Laws ,
Summary Judgment ,
Taco Bell ,
Wage and Hour
Tax service franchisor, H&R Block, was recently vindicated in having terminated a franchisee for violating an in-term non-compete covenant. A United States District Court granted the franchisor summary judgment in Devore v....more
8/2/2018
/ Breach of Contract ,
Commercial Leases ,
Competition ,
Contract Termination ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
H&R Block ,
Marijuana Related Businesses ,
Non-Compete Agreements ,
Office Space ,
Royalties ,
Summary Judgment ,
Termination Clauses ,
Tortious Interference
Franchise agreements commonly prohibit the franchisee from soliciting or hiring workers employed by the franchisor or other franchisees. This may take the form of “no-hire” or “no-switching” clauses that prohibit hiring each...more
8/1/2018
/ Antitrust Violations ,
Enforcement Actions ,
Federal Trade Commission (FTC) ,
Franchisee ,
Franchises ,
Hiring & Firing ,
No-Hire/No-Solicitation Agreements ,
No-Poaching ,
Non-Solicitation Agreements ,
Restraint of Trade ,
State Attorneys General
In May, the U.S. Supreme Court held that mandatory arbitration agreements containing class action or collective action waivers must be enforced as written....more
6/29/2018
/ Arbitration ,
Arbitration Agreements ,
Class Action ,
Class Action Arbitration Waivers ,
Collective Bargaining ,
Employment Contract ,
Epic Systems Corp v Lewis ,
Federal Arbitration Act ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
NLRA ,
NLRB ,
Preemption ,
Private Attorneys General Act (PAGA) ,
Remand ,
Reversal ,
Savings Clause ,
SCOTUS
On June 21 the U.S. Supreme Court reversed prior case law and let states tax online retailers that do not have physical presence in the state. The ruling also has significant implications for franchise systems that sell...more
6/28/2018
/ Appeals ,
Commerce Clause ,
Constitutional Challenges ,
Franchise Agreements ,
Franchises ,
Franchisors ,
Internet Retailers ,
Interstate Commerce ,
Out-of-State Companies ,
Physical Presence Test ,
Quill ,
Reversal ,
Royalties ,
Sales & Use Tax ,
SCOTUS ,
South Dakota v. Wayfair ,
Substantial Nexus
In Curry v. Equilon Enterprises LLC, a California court ruled, and the Court of Appeal affirmed, that a class-action wage and hour lawsuit against Shell Oil could not go forward because the service station manager bringing...more
A recent case from Indiana demonstrates consequences to a franchisor that deviates from the contractually agreed audit method. In Noble Roman's Inc. v. Hattenhauer Distributing Co., an Indiana federal court granted a pizza...more
A Florida federal court refused to dismiss a franchisor's claim for past due royalties and lost future profits.
The case concerned an Interim Healthcare staffing franchise in Arizona. The franchisor issued a default notice...more
4/30/2018
/ Breach of Contract ,
Contract Termination ,
Contract Terms ,
Failure To Pay ,
Franchises ,
Franchisors ,
Future Royalties ,
Lost Profits ,
Motion to Dismiss ,
Notice of Default ,
Pleadings ,
Royalties
A Florida federal court held that the non-compete provision in a chocolate shop franchise agreement was enforceable against an ex-franchisee operating a competing chocolate store at the former franchised location....more
Structuring a franchise to reduce risk of joint employment and vicarious liability means limiting a franchisor's control over franchisees. This is a challenge in a professional services franchise, where the brand is...more
4/2/2018
/ Code of Conduct ,
Control Test ,
Employee Misconduct ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Fraud ,
Joint Employers ,
Professional Services Contract ,
Tax Preparers ,
Vicarious Liability