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Update and Discussion on Legal and Practical Issues
A Florida district court granted a motion to stay court proceedings pending arbitration between a franchisor and a third-party, non-signatory to a franchise agreement, containing an arbitration clause....more
An Oregon federal court denied a franchisor’s motion to compel the principals and personal guarantors of a franchisee into arbitration because the parties did not sign arbitration agreements in the franchise documents....more
On 28 September 2022, the French Cour de cassation upheld the French Court of Appeal’s decision in Kabab-Ji SAL v. Kout Food Group that the law of the seat, rather than the law governing the underlying contract, governed...more
In an important recent decision, the U.K. Supreme Court provided further guidance on how to determine the law that applies to an international arbitration agreement. In its unanimous decision in Kabab-Ji SAL v Kout Food...more
Following the decision in Enka Insaat ve Sanayi A.S. v OOO Insurance Company Chubb [2020] UKSC 38 (Enka) on which we previously reported, the UK Supreme Court has provided further helpful clarification as to the approach to...more
Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Fraud/Misrepresentation - Minnesota Federal Court Rules that Fraud and Misrepresentation...more
The plaintiffs filed a class action against Domino’s, alleging that the company’s franchise agreement violated federal antitrust law as well as state law. Domino’s moved to compel arbitration, and the plaintiffs opposed on...more
We recently described how organization rules, like those of the American Arbitration Association (AAA), can have a legal impact on whether a court or an arbitrator resolves a dispute. See our blog post of May 4, 2020,...more
As the world welcomes in the Year of the Rat, we take a look back at five recent decisions that made big waves in the Year of the Pig in their different ways, across Hong Kong, Singapore, and England. ...more
The Ninth Circuit ruled that a California Matco Tool franchisee, John Fleming, could bring a class action wage and hour suit in California, even though a forum selection clause in the distribution agreement specified Ohio...more
If there is no express law of the arbitration agreement, the law with which that agreement has its closest and most real connection is either the law of the underlying contract or the law of the seat of the arbitration. The...more
A federal appeals court upheld a lower court’s refusal to order arbitration against a franchisee who bought an existing franchise. This was despite a provision in the franchise agreement to arbitrate “most disputes.”...more
Plaintiff Choice Hotels International Inc. filed an application to confirm arbitration award and a motion for default judgment against a fanchisee company and its owner in connection with an arbitration initiated before the...more
Pursuant to the FAA, a motion to vacate, modify, or correct an arbitration award must be served within three months after the award is filed or delivered. 9 U.S.C. § 12. Thus, a Maryland federal court held that the...more
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
Many franchisors employ arbitration as its preferred method of dispute resolution. Generally, courts view arbitration agreements favorably. An agreement to arbitrate waives the fundamental right to have a court decide the...more
Choice Hotels filed an application to confirm an arbitration award of over $247,000 for the alleged breach of a franchise agreement by two defendants, which failed to timely commence construction of a hotel. The defendants...more
The Ninth Circuit reversed a district court ruling that had compelled arbitration, holding that a party may not enforce an arbitration agreement where the clause is contained in a nonbinding contract. The parties had entered...more
Though some of the more important terms may appear early in a franchise agreement, some key terms placed near the end - the portion of the agreement that is often called "boilerplate" - may determine who wins or loses a legal...more
As we stated previously, the potential impact of whether entitlement to class arbitration is a “gateway issue” will likely diminish with each passing year. (See our March 12, 2015, blog article on the denial of certiorari in...more
In 2010, Steak 'n Shake, a franchisor of hamburger restaurants, adopted new pricing and promotion policies that required all franchisees to follow company mandated pricing on every menu item and to participate in all...more
A number of recent court decisions have addressed the enforceability of contract clauses that call for alternative dispute resolution procedures instead of traditional courtroom litigation. ...more