News & Analysis as of

Covenant of Good Faith and Fair Dealing Franchisors Breach of Contract

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

Lewitt Hackman

Franchisor 101: Pizza Franchisor’s Release Overcooked

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A federal district court denied a pizza franchisor’s motion to dismiss a former franchisee’s complaint, finding the former franchisee sufficiently pleaded the franchisor coerced the franchisee into signing a general release....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

Lewitt Hackman

Franchisor 101: Transfer DQ’d

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A federal court in Wisconsin ruled that Dairy Queen did not breach a 1952 franchise agreement with a franchisee by requiring a prospective buyer of the franchise to sign an updated franchise agreement. Dairy Queen and a...more

Lewitt Hackman

Franchisee 101: Meet the New Boss

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A Tim Hortons franchisee sued the franchisor for breach of six franchise agreements and an area development agreement. Tim Hortons counterclaimed for breach of contract based on failure by the franchisee to meet the...more

Lewitt Hackman

Franchisor 101: Breaking Up Is Hard to Do

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A federal district court in Nevada partly denied a franchisor’s summary judgment motion on claims brought by a franchisee. IJL Midwest entered into several franchise agreements with a franchisor of a dating and...more

Lewitt Hackman

Franchisee 101: Franchisor’s Impact Study Fails to Influence Court

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A federal district court denied KFC’s defensive summary judgment motion, enabling its franchisee to go to trial on claims against KFC for breach of the implied covenant of good faith and fair dealing by opening a competing...more

Lewitt Hackman

Franchisor 101: Defaults Sink Bathroom Remodel Franchisee

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On competing motions for a temporary restraining order (“TRO”) by ReBath – a nationwide bathroom remodeling franchisor, and its terminated franchisee, ReBath prevailed in restraining the ex-franchisee’s further operations. A...more

Lewitt Hackman

FRANCHISEE 101: Bar-B-Q Blues — A Tale of Friendship, Partnership, and Deceit

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A federal appeals court reversed dismissal of a claim against a barbeque restaurant franchisor. The court found that, despite having signed releases in favor of the franchisor, a former franchisee had valid claims for...more

Lewitt Hackman

FRANCHISOR 101: Selective Enforcement of Franchise Agreement Provisions

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A franchisor's ability to set renewal terms can bind franchisees to terms in a later franchise agreement before the renewal agreement even exists. In a recent case, a franchisor could enforce a hypothetical non-compete...more

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