A Louisiana district court held that a franchisee waived its right to remove a dispute with its franchisor from state court to federal court, based on the forum selection clause in the parties’ franchise agreement.
Real estate franchisor 1 Percent Lists Franchises, LLC (“1 Percent”), organized and headquartered in Louisiana, entered into a franchise agreement with Sell Smart, LLC (“Sell Smart”), a Washington limited liability company, for a franchised real estate agency in King County, Washington. 1 Percent sued for breach of the franchise agreement in Louisiana state court, claiming that Sell Smart began engaging in competitive business practices.
Sell Smart removed the action to federal court on the basis of the parties’ residing in different states. 1 Percent subsequently filed a motion for remand.
The franchisor alleged that Sell Smart waived its statutory right of removal by executing a franchise agreement that expressly provided for jurisdiction and venue “in any state or federal court of competent jurisdiction located in St. Tammany or Orleans Parish, Louisiana.” This clause further provided that the parties “waive any objection to the jurisdiction and venue of such courts.” Sell Smart argued this clause did not amount to a clear and unequivocal waiver of the right to remove.
A defendant may waive its right to removal by (1) explicitly stating that it is doing so; (2) allowing the other party the right to choose venue; or (3) establishing exclusive venue in the contract. However, for a contractual clause to prevent a party from exercising its right to removal, the clause must give a clear and unequivocal waiver of that right. Ambiguous language cannot constitute a clear and unequivocal waiver.
For a forum selection clause to be exclusive, it must go beyond establishing that a particular forum will have jurisdiction and must clearly demonstrate the parties’ intent to make that jurisdiction exclusive.
After analyzing the franchise agreement, the district court determined that the parties’ forum selection clause provided that both 1 Percent and Sell Smart consented and irrevocably submitted to the jurisdiction and venue set forth in that provision. The court stated that if the clause stopped there, it would not have provided a clear and unequivocal waiver of the right to remove.
However, the inclusion of additional language that stated that Sell Smart “waived any objection to the jurisdiction and venue of such courts” did constitute a clear and unequivocal waiver.
The choice to initiate litigation against franchisees in either state court or federal court in the franchisor’s home state is often a strategic one that franchisors want to insulate from challenge. Franchisors should evaluate whether the forum selection clauses in their franchise agreements afford maximum protection when selecting their venue of choice.
1 Percent Lists Franchises, LLC v. Sell Smart, LLC, Case No. 25-2153 Section: “G”(1) (E.D. La. Jan. 23, 2026).
