News & Analysis as of

Franchise Agreements

Employees Again Sue Jimmy John's Based on Hiring Restriction

A few years ago, the Jimmy John’s sandwich restaurant chain ran into problems over noncompetition agreements entered into with hourly workers at its franchisees’ stores. Several state attorneys general contended that...more

FRANCHISEE 101: Out of Time, Out of Gas

by Lewitt Hackman on

A California federal judge held that breach of contract claims brought by franchisees of two ARCO-branded gas stations against their franchisor BP West Coast Products were untimely, and declined to adopt the franchisees'...more

Federal Court Reinforces That Franchisors Should Control Advertising to Ensure Uniformity

by Pepper Hamilton LLP on

An Illinois federal judge recently found that a franchisor has the absolute right to control its franchisees’ advertising of the products and services offered under a franchise. Lokhandwala v. KFC Corp., No. 17-cv-6394 (N.D....more

No-Hire And No-Solicit Covenants Could Be Overcooked

by Fox Rothschild LLP on

Many franchise agreements contain a provision that restricts a franchisee from hiring or soliciting the employees of the franchisor or other franchisees. A class action lawsuit that was recently filed in the Eastern District...more

Food & Beverage Litigation Update | January 2018 #3

House Panel Questions FDA Officials on Food-Recall Audit - One day after the U.S. Food and Drug Administration (FDA) issued draft guidance on proposals to expedite product warnings and recalls, FDA and other health...more

Full Speed Ahead: SBA Directory May Hasten Franchisee Lending Process

by Lewitt Hackman on

As of January 1, 2018, the U.S. Small Business Administration (SBA) will begin implementing new rules that will affect franchisors, entrepreneurs wishing to join a franchise system, and lenders or CDCs (Certified Development...more

FRANCHISEE 101: Offer Too Little Too Late

by Lewitt Hackman on

A Florida federal district court found that a doughnut franchisee's failure to pay royalties and other fees constituted a material breach of contract justifying termination, even though the franchisee expressed a willingness...more

FRANCHISOR 101: NLRB: Out With the New

by Lewitt Hackman on

On December 14, 2017, the National Labor Relations Board (Board) in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017) expressly overruled the divisive joint-employer standard adopted by Browning-Ferris...more

Franchisees Lose Bid To Vacate Arbitration Award Enforcing Non-Compete Clause Despite Claim That Arbitrator Manifestly Disregarded...

by Carlton Fields on

A set of former franchisees are prohibited from violating the terms of a non-compete clause with franchisor Wild Bird Centers of America (“WBCA”) for two years after the Fourth Circuit recently upheld the denial of their...more

Federal Court Rules Against Calzone Franchisor In Meaty Lawsuit Against Former Franchisee

by Seyfarth Shaw LLP on

In a meaty decision involving the intersection of restrictive covenant and franchise law, the United States District Court for the Southern District of Ohio recently denied a request by D.P. Dough Franchising, LLC (“D.P....more

Franchising – What Is It and Is It for You?

by Varnum LLP on

As an entrepreneur or person interested in starting a new business or growing an existing one, franchising might be an option for you to enter the market more quickly or grow more aggressively, and perhaps increase your...more

FRANCHISEE 101: All in the Family

by Lewitt Hackman on

Some creativity can help in passing a former franchised business to the next generation, particularly if the franchisor has no part in the franchisee's succession plan. A federal court in Nebraska preliminarily enjoined...more

FRANCHISOR 101: Injunction Bottleneck

by Lewitt Hackman on

A restaurant franchisor, World of Beer Franchising ("WOB"), recently lost an appeal to enforce a post-termination restriction against a franchisee launching a competing business. Both the trial and appellate court ruled...more

Did You Hear? Watch Out For Ohio’s BOPPA!

by Fox Rothschild LLP on

A recent decision in the United States District Court of Arizona (“Court”) could have far-reaching consequences to many franchisors based on the broad-sweeping principles the Court used in its reasoning. In Zounds Hearing...more

EU Retail News - November 2017

by Bryan Cave on

From 2 January 2018, the rules on how you can portray under-18s in advertising will get stricter. Marketing communications in non-broadcast media (including newspapers, direct marketing communications, posters, online...more

Drafting Matters: Do Your Non-Competes Bind The Correct Parties?

by Fox Rothschild LLP on

A federal court in Colorado recently upheld a franchisor’s non-competition provision despite that state’s strong public policy against non-competes. The franchisor prevailed due to its thoughtful contract drafting and ability...more

5 Key Takeaways-What You Need to Know in the US and Latin America About Franchising and IP

Kilpatrick Townsend Partner Marc Lieberstein, Co-Chair of the firm’s Retail & Consumer Goods Industry Team and member of the Firm’s Latin American Focus Group, recently joined other thought-leaders on an international panel...more

SBA to Require Franchisors Be Listed on Franchise Directory for Franchisees to Be Eligible for SBA Financing

by Snell & Wilmer on

Effective January 1, 2018, the U.S. Small Business Administration (SBA) will only process loans to fund the acquisition and development of new franchises if the franchisor is listed on the SBA’s new Franchise Directory....more

Belgian Retail Newsletter

by McGuireWoods LLP on

European Parliament wants harmonized franchising legislation 7 NOVEMBER 2017 - In September 2017, the European Parliament passed a resolution on the functioning of franchising in the European retail sector. This...more

FRANCHISEE 101: Thirty-one Flavors of Fees (Or Just One)

by Lewitt Hackman on

Baskin-Robbins charges a dairy supplier a so-called "commercial factor" fee for the right to make and sell Baskin-Robbins proprietary ice cream to franchisees. The supplier's pricing to franchisees includes an amount equal to...more

FRANCHISOR 101: Arbitr-“all”

by Lewitt Hackman on

A federal court in New Jersey granted a franchisor's motion to compel arbitration of disputes involving seven frozen yogurt franchises, even though the claims were subject to different arbitration provisions in different...more

Does Arbitration Make Sense For Franchisors? A Litigator’s Perspective

by Mulcahy LLP on

Let’s face it; arbitration is not always the quicker, cheaper forum for parties to resolve their differences. Although arbitration does have the potential to be more economical and efficient than court, in practice, these...more

Implied Covenant Of Good Faith Does Not Trump Express Terms

by Fox Rothschild LLP on

The U.S. Court of Appeals for the Third Circuit upheld a New Jersey district court’s decision that 7-Eleven did not violate the New Jersey Franchise Practices Act (NJFPA) after the franchisor terminated a New Jersey...more

Accidental Franchise = Potential Lawsuits, Fines + Other Penalties

by Lewitt Hackman on

Business owners looking to expand may leave themselves vulnerable to several obvious losses, including those related to finance, brand identity, and customer loyalty. Resources, including exemplary human resources, are...more

Franchising in Saudi Arabia: top tips for navigating the Kingdom's regulatory framework

by DLA Piper on

The Kingdom of Saudi Arabia (KSA) continues to present attractive propositions for international franchisors seeking to expand their business operations. Navigating the KSA's complex regulatory framework however is not...more

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