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Is Franchising Doomed?
Strategies for Negotiating with a Franchisee and Franchisor
Before committing to a franchise business, consider...
A federal court in Massachusetts recently granted, in part, a Motion for Preliminary Injunction as to enforcement of franchise agreement noncompete covenants but denied the motion as to claims of trademark infringement,...more
A federal court in Arizona recently granted a franchisee’s motion for temporary restraining order preventing termination of its franchise agreement and the franchisor’s withdrawal of any funds from the franchisee’s accounts....more
Deciding whether to choose state or federal court can be outcome determinative. This is particularly important in deciding to remove a case from state to federal court. Some state franchise statutes clearly allow a court to...more
A Minnesota district court issued a preliminary injunction against a former franchisee who engaged in a competing business during the franchise relationship. Snap Fitness, Inc., a gym franchisor, entered into a franchise...more
A Kansas district court denied a franchisor’s motion for preliminary injunction against its former franchisee who engaged in competing businesses immediately after terminating the franchise relationship....more
A Colorado federal court denied a franchisor’s request for preliminary injunction that would enforce a non-compete provision against a former franchisee. The franchisor of spice and tea shops known as Spice & Tea Merchants...more
A federal district court in Texas denied a preliminary injunction filed by a franchisee (“EYM”) after Pizza Hut, as franchisor, terminated the franchise agreements....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
In LeTip World Franchise LLC v. Long Island Social Media Group LLC, the U.S. District of Court for the District of Arizona granted a temporary restraining order in favor of a franchisor, LeTip World Franchise LLC (“LeTip”)...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
In Integrity Real Estate Consultants v. Re/Max of New York, Inc., a franchisee, Integrity Real Estate Consultants (“Integrity”), sued a real estate service provider franchisor, Re/Max of New York, Inc. (“Re/Max”), in New York...more
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
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
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. 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
A group of franchisees sued OsteoStrong, a franchisor of bone density improvement centers. They claimed omissions in the FDD about bankruptcies and lawsuits, and misrepresentations of patent rights to equipment and...more
In November 2020, the Supreme Court of Canada released its decision in 1688782 Ontario Inc. v Maple Leaf Foods Inc. This is an important decision clarifying the analytical approach to the duty of care analysis in negligence...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
In a misappropriation of trade secrets action, a franchisor sued a prospective franchisee, claiming breach of a non-disclosure agreement ("NDA") by operating a competing business. The prospective franchisee signed the NDA...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
A franchisee looking to transfer assets of a franchised business may be subject to the franchisor's right of first refusal, the franchisor's option to purchase the business, or both, depending on the language of a franchise...more
Franchisees aren't always excited when their franchisor introduces a new policy. But if a new policy overreaches and might doom a franchisee's business, can it be stopped before it starts?...more