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A federal court in Michigan recently granted several related franchisors’ motions to dismiss a franchisee’s claims for violations of the Michigan Franchise Investment law. Benjamin Franklin Franchising SPE LLC v. David...more
A Massachusetts federal district court enforced a non-compete provision in a franchise agreement to enjoin former franchisees from operating a different branded automotive business at the same location as the former...more
A Pennsylvania federal court refused to enforce non-competition and non-solicitation covenants in a franchise agreement of a nationwide tax preparation service franchisor. The court dismissed the franchisor’s request for...more
A federal court in Virginia denied a franchisor’s motion for preliminary injunction against a former franchisee violating the franchise agreement’s post-termination noncompete. JTH Tax, LLC v. Younan, 2023 WL 6304865 (E.D....more
A federal court in Pennsylvania granted in part and denied in part a former franchisee’s motion to dismiss a franchisor’s allegation that she misappropriated trade secrets and breached the franchise agreement. JTH Tax, LLC v....more
A Minnesota federal court denied cookie dough franchisor Cookie Dough Bliss Franchising’s motion for a temporary restraining order and preliminary injunction against a former Minnesota franchisee and its owners....more
A Minnesota bankruptcy court granted Fantastic Sams a preliminary injunction against a former Fantastic Sams franchisee, finding the operation of four new hair salons by the former franchisee was prohibited by enforceable...more
A gym franchisor recently secured a preliminary injunction against its former franchisee prohibiting the franchisee from operating an independent gym on the same location and using the franchisor’s trade secrets. Chris...more
A Minnesota bankruptcy court granted Fantastic Sams summary judgment and enjoined a former franchisee from violating the post-termination noncompete in its franchise agreements after the franchisee rejected the agreements in...more
An Ohio appellate court upheld the state trial court’s decision to grant a permanent injunction against two former franchisees of an auto body shop franchise working for a competitor in violation of the franchise agreement’s...more
A New Jersey federal court denied a franchisor’s motion for preliminary injunction against a franchisee due to franchisor’s 11 month delay in bringing the motion. Franchisee entered into two franchise agreements with H-1 Auto...more
The right to rescind (or void) a contract is an extraordinary remedy. However, as franchise lawyers know, certain states provide franchisees a right to rescind a franchise agreement in certain situations, particularly where a...more
An Indiana federal court granted hamburger and milkshake franchisor, Steak n Shake, a temporary restraining order (“TRO”) against a franchisee to enforce post-termination obligations under franchise and area development...more
Second Circuit Affirms Dismissal of Franchisees’ Minimum Wage and Unjust Enrichment Claims - A divided panel of the Second Circuit Court of Appeals has concluded that claims of improper wage deductions and unjust...more
A federal court in Louisiana granted a preliminary injunction against a former franchisee of Liberty Tax Service for breaching post-termination covenants under a franchise agreement. Liberty Tax entered into franchise...more
Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Missouri Federal Court Holds Franchisor Controls Sufficient to Survive Motion to Dismiss...more
A federal court in Denver granted Fitness Together Franchise, LLC a preliminary injunction against the owner of three former franchisees, three former franchisee entities and three additional entities formed to operate a...more
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...more
A Florida federal court granted a preliminary injunction against a terminated franchisee. The court enjoined the ex-franchisee from using the franchisor’s trademarks and trade dress. The court enforced the franchisor’s...more
A federal district court in Michigan granted a preliminary injunction in favor of tax preparation franchisor, Liberty Tax Service (JTH Tax, Inc. v. Magnotte, E.D. Mich., ¶16,575), finding it was likely to succeed on its...more
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
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
In Devore v. H&R Block, the franchisor H&R Block was found to have lawfully terminated a franchisee for violating an in-term non-compete covenant, because the franchisee permitted its office manager and prior operator of the...more
Though an individual owner and operator of a formerly franchised Church's Chicken restaurant in Texas was not a signer of the franchise agreement, a district court ruled the individual was subject to the agreement's...more
If a franchisor waives the non-compete provision in its current franchise agreement, can it enforce a non-compete when the franchise agreement is renewed? According to a recent decision by the 9th Circuit Court of Appeals,...more