A federal court in Texas has denied an individual owner’s motion to dismiss for lack of personal jurisdiction despite the fact that he had not signed the relevant franchise agreement or corporate guaranty in his individual capacity. Alamo Intermediate II Holdings, LLC v. Birmingham Alamo Movies, LLC, 2024 WL 1813449 (W.D. Tex. Apr. 25, 2024). In January 2022, Alamo Intermediate II Holdings, LLC entered into a franchise agreement with Birmingham Alamo Movies, LLC (BAM), pursuant to which BAM would develop an Alamo Drafthouse movie venue in Birmingham. Orchestra Partners Development, LLC agreed to serve as Franchisee’s developer of the project. Hunter Renfroe, the co-owner of BAM and Orchestra Partners—and, under the terms of the franchise agreement, the operating and controlling principal of BAM—signed the franchise agreement on behalf of BAM and a corporate guaranty agreement on behalf of Orchestra Partners. After development of the venue failed, Alamo filed suit in federal court asserting breach of contract claims against BAM, Orchestra Partners, and Renfroe in his individual capacity. Renfroe moved to dismiss, arguing the court did not have personal jurisdiction over him.

The court denied Renfroe’s motion to dismiss, concluding it had personal jurisdiction over Renfroe. In doing so, the court analyzed whether Renfroe was bound by the terms of the franchise agreement and its forum-selection clause under which the parties agreed to submit to the jurisdiction of the federal court in the Western District of Texas. The court concluded that Renfroe was a party to the franchise agreement and bound by its terms even though Renfroe did not sign in his individual capacity. Specifically, the court reasoned that Renfroe’s role as a principal of BAM, the fact that the franchise agreement named him as a Controlling Principal, and several provisions in the franchise agreement that applied to Controlling Principals, were indicative of an intent for Renfroe to be individually bound by the franchise agreement. Alternatively, the court opined that Renfroe was bound by the forum-selection clause under the “closely related” doctrine. It reasoned that, even if Renfroe was not a party to the franchise agreement, his roles as co-owner and principal for each of BAM and Orchestra Partners, and the benefits he would receive under the franchise agreement, showed that Renfroe was inextricably intertwined with the parties, and therefore should be subject to the terms of the franchise agreement.

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