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Contract Terms Breach of Contract Franchisors

Foley & Lardner LLP

Clear Terms of Franchise Agreement Are Enforced Against Franchisee

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A recent federal court decision in T&T Management, Inc. v. Choice Hotels, Inc. underscores key contractual and operational considerations for franchisors. T&T filed suit in U.S. District Court for the District of Minnesota...more

Fox Rothschild LLP

IFA Takeaways: How Smart Franchisors Stay Out of Court

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The International Franchise Association’s Annual Convention is always filled with useful take home information for franchise practitioners. Last week, I attended the session “Proactive Strategies for Franchisors to Prevent...more

Lathrop GPM

California Federal Court Grants Franchisor’s Motion to Compel Arbitration but Finds Forum Selection and Choice of Law Clauses...

Lathrop GPM on

A federal court in California recently granted franchisor Spiffy Franchising, LLC’s motion to compel arbitration of a franchisee’s claims, but found the North Carolina forum selection and choice of law provisions in the...more

Lathrop GPM

Minnesota Federal Court Grants Franchisor’s Motion for Preliminary Injunction for Noncompete and Lanham Act Violations by...

Lathrop GPM on

A federal court in Minnesota recently granted franchisor Snap Fitness Inc.’s motion for preliminary injunction against an out-of-state franchisee that announced its intentions to open a competing gym during the term of the...more

Lathrop GPM

Tennessee Appellate Court Finds that Venue Clause in Franchise Agreement is Permissive and Not Mandatory

Lathrop GPM on

The Tennessee Court of Appeals reversed a district court’s dismissal of a franchisee’s declaratory judgment claim, finding that the claim was properly brought in Tennessee.  Lakeway Real Estate2, LLC v. ERA Franchise Sys.,...more

Lathrop GPM

Franchisee’s Execution of Competing Franchise Agreement During Franchise Term Forecloses Claims Against Former Franchisor

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A federal court in New Jersey granted the franchisor of the Holiday Inn and Holiday Inn Express brands (Holiday Hospitality) summary judgment on former franchisee Scion Hotels’ complaint alleging violations of the New Jersey...more

Lathrop GPM

Michigan Precedent on Michigan Franchise Investment Law Held to Trump Inconsistent Sixth Circuit Precedent on Private Right of...

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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

Lathrop GPM

Illinois Federal Court Denies Cross Motions for Summary Judgment on Breach of Contract and Guaranty Claims Due to Ambiguity in the...

Lathrop GPM on

A federal court in Illinois recently denied cross motions for partial summary judgment as to franchisor 360 Painting, LLC’s claims for breach of contract by painting franchisee R. Sterling Enterprises, Inc. (RSE), and breach...more

Lathrop GPM

North Carolina Federal Court Rejects Hotel Franchisor’s Motion to Dismiss Customer’s Breach of Contract Claim

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A federal court in North Carolina denied a hotel franchisor’s motion to dismiss a customer’s breach of contract claim. Brittian v. Extended Stay America, 2024 WL 1841600 (W.D. N.C. Apr. 26, 2024)....more

Lathrop GPM

California Court of Appeals Affirms Rejection of Reverse Royalty Damages in a Breach of Contract Action by Franchisee

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An appellate court in California has affirmed a trial court’s rejection of more than $4 million in lost business profits, which appellant Glen Suh alleged in a breach of contract action against franchisor Boba Time, Inc. Suh...more

Lathrop GPM

Virginia Federal Court Denies Franchisor’s Motion for Preliminary Injunction

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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

Lathrop GPM

Tenth Circuit Holds that Good Faith and Fair Dealing Claim Requires Expectation Created by Express Contract Terms

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The Tenth Circuit has ruled in favor of KFC in a dispute with a franchisee alleging a breach of the implied covenant of good faith and fair dealing. Kazi v. KFC US, LLC, 2023 WL 4983119 (10th Cir. Aug. 4, 2023)....more

Lathrop GPM

North Carolina Federal Court Rules That Franchise Agreement’s 1-Year Statute of Limitations Clause Barred Action Against...

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A federal court in North Carolina recently dismissed a complaint brought by Bigelow Corporation against its franchisor Hound Town USA because the claims were time barred. Bigelow Corporation v. Hounds Town USA, LLC, 2023 WL...more

Foley & Lardner LLP

Court Looks at What a Franchise Is Under the Minnesota Franchise Act

Foley & Lardner LLP on

In Louis Degidio, Inc. v. Industrial Combustion, LLC, Louis Degidio, Inc. (Degidio) and Louis Degidio Services, Inc. (Degidio Services) sued Industrial Combustion, LLC (IC), a manufacturer of “institutional boiler system”...more

Lathrop GPM

Michigan Federal Court Grants Motion to Dismiss for Lack of Personal Jurisdiction and Forum Non Conveniens

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A federal court in Michigan granted a motion to dismiss claims that franchisor Bateel International, LLC had violated the Michigan Franchise Investment Law and the Texas Business Opportunity Act. Luxury Concepts, Inc. v....more

Lathrop GPM

Ohio Federal Court Denies Motion to Dismiss Based on General Releases

Lathrop GPM on

A federal court in Ohio recently declined to dismiss a franchisee’s claims of breach of contract, rejecting the franchisor’s argument that the claims were barred by general releases included in the parties’ agreement. SC Am....more

Lathrop GPM

New York Appellate Court Dismisses Royalties Claim Because of Franchisor’s Breach Under Preliminary Injunction

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A state appellate court in New York recently held a franchisor was not entitled to unpaid royalty fees because of its own breach of a franchise agreement reinstated by preliminary injunction. Integrity Real Estate Consultants...more

Lathrop GPM

New Jersey Federal Court Finds Franchisee’s Defense of Fraudulent Inducement Sufficient to Block Franchisor’s Motion for Summary...

Lathrop GPM on

A federal court in New Jersey has denied a franchisor’s motion for summary judgment on its claim for breach of contract by its franchisee, finding that the franchisee raised issues of material fact regarding whether it had...more

Lathrop GPM

Minnesota Federal Court Holds Assignment of Franchise Does Not Constitute a Sale Under the Minnesota Franchise Act

Lathrop GPM on

A federal court in Minnesota has dismissed a claim under the Minnesota Franchise Act (MFA), holding that a franchisor’s consent to the assignment of a franchise does not constitute a sale or an offer to sell under the Act....more

Lathrop GPM

New Jersey Federal District Court Denies Franchisee’s Motion to Compel Arbitration and Grants Franchisor’s Motion to Dismiss

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A federal court in New Jersey has denied a motion to compel arbitration in a dispute over alleged breach of a franchise agreement. Passion for Restaurants, Inc. v. Villa Pizza, LLC, 2022 WL 18024209 (D.N.J. Dec. 30, 2022)....more

Lathrop GPM

Florida Federal Court Grants Franchisor’s Motion to Dismiss Breach of Implied Covenant of Good Faith and Fair Dealing Claims

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A federal court in Florida recently granted a franchisor’s motion to dismiss a franchisee’s claim for breach of the implied covenant of good faith and fair dealing, but allowed a claim for breach of contract to proceed....more

Stark & Stark

The How, When, and Why of Franchise Termination in New Jersey

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Terminating a franchise can pose several potential pitfalls and expose a franchisor to significant liability. A franchisor may not simply cancel, terminate, or refuse to renew a franchisee for just any reason....more

Dorsey & Whitney LLP

“Everything zen? Everything zen? I don’t think so...” - MAE Clauses in the Time of COVID

Dorsey & Whitney LLP on

On March 1, 2022, the Delaware Court of Chancery delivered a memorandum opinion ordering a yoga franchisor to complete the acquisition of its franchisee’s chain of yoga studios. The case arose out of the parties’ pre-COVID...more

Lewitt Hackman

Franchisor 101: No Tax on Renewals

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A federal court in Virginia denied tax franchisor, Liberty Tax’s, motion to dismiss complaints by two of its area developers (“ADs”). The ADs claimed Liberty Tax breached their contract for wrongfully terminating, failing to...more

Lathrop GPM

The Franchise Memorandum - Issue # 268 (Distribution Issue)

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Welcome to The Franchise Memorandum by Lathrop GPM. Periodically, The Franchise Memorandum focuses on topics primarily of interest to companies that use distributors and dealers rather than manage a business format franchise...more

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