The Franchise Memorandum - Issue # 259

Lathrop GPM
Contact

Colorado Federal Court Applies Forum Selection Clause to Non-Signatory Entities Controlled by Former Franchisees -

A federal court in Colorado held that entities controlled by former franchisees were bound by the forum selection clauses in the franchisees’ terminated franchise agreements. Fitness Together Franchise, LLC v. EM Fitness, LLC, 2020 WL 6119470 (D. Colo. Oct. 16, 2020). EM Fitness and related franchisee-defendants operated several Fitness Together franchises in Ohio under franchise agreements that contained post-termination noncompetition and Colorado forum selection clauses. The franchisee-defendants negotiated the early termination of their franchise agreements, but, at the same time, formed new entities through which they began operating competing businesses at the same locations previously occupied by the franchised businesses. Fitness Together sued its former franchisees and the newly formed entities in federal court seeking to enjoin them from breaching the post-termination noncompetition provisions of the franchisee-defendants’ agreements. The new entities challenged the court’s personal jurisdiction over them, arguing that they were not signatories to the franchise agreements and therefore should not be bound by their forum selection clauses.

Please see full Newsletter below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Lathrop GPM | Attorney Advertising

Written by:

Lathrop GPM
Contact
more
less

Lathrop GPM on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.