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Franchises Contract Termination

Lathrop GPM

Michigan Court of Appeals Affirms Dismissal of Certain Franchisee Claims Against Franchisor Due to Release of Liability and...

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The Michigan Court of Appeals recently affirmed a trial court’s dismissal of certain claims by franchisees Red Fit, LLC and Cali Red, LLC against franchisor Red Effect International Franchise, LLC based on a release of...more

Lathrop GPM

Federal Circuit Reverses Preliminary Injunction on Franchisor’s Patent and Trade Dress Infringement Claim

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The Federal Circuit Court of Appeals reversed a preliminary injunction granted as to franchisor Urban Air’s patent and trade dress infringement claims against Kangaroo, LLC. UATP IP, LLC v. Kangaroo, LLC, 2024 WL 658205 (Fed....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

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

Lathrop GPM

Minnesota Bankruptcy Court Enjoins Franchisee’s Breach of Post-Termination Noncompete

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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

Lathrop GPM

Oklahoma Federal Court Grants Franchisor’s Post-Termination Motion for Preliminary Injunction Related to Trademark Infringement

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A federal court in Oklahoma granted franchisor Pizza Inn, Inc.’s motion for preliminary injunction preventing two former Pizza Inn franchisees – Odetallah and Allen’s Dynamic Food – from operating competing pizza restaurants...more

Lathrop GPM

Connecticut Federal Court Denies Franchisee’s Motion for Temporary Restraining Order Following Termination

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A federal court in Connecticut denied a franchisee’s motion for a temporary restraining order permitting it to operate until the court could hear a preliminary injunction motion. A.B. Corp. v. Dunkin' Donuts Franchising, LLC,...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

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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

Stark & Stark

What to do When Your Franchisee Files for Bankruptcy

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With the economic downturn caused by COVID-19, many expected a tidal wave of commercial bankruptcy filings. After an initial spike of retail bankruptcy cases at the outset of the pandemic, the onslaught of bankruptcy has not...more

Lewitt Hackman

Franchisor 101: Pizza Termination in 30 Days or Less

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An area developer entered into three agreements with a pizza franchisor and developed 50 franchises in Texas. The franchisor, Pizza Inn, Inc., tried to terminate all three contracts, though each had a twenty-year initial term...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

Lathrop GPM

The Franchise Memorandum - Issue # 264 (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

Lathrop GPM

The Franchise Memorandum - Issue # 263

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Illinois Federal Court Excludes Plaintiffs’ Expert Testimony on Certification Motion in Anti-Poaching Class Action - A federal court in Illinois granted Jimmy John’s motion to exclude expert testimony of a putative class...more

Lewitt Hackman

Franchisor 101: Court Delivers Pizza Franchisor Liquidated Damages

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The Sixth Circuit Court of Appeals recently affirmed a $2.6 million award of liquidated damages in favor of a pizza franchisor and a summary judgment order enforcing termination of franchise agreements due to nonpayment and...more

Lathrop GPM

The Franchise Memorandum - Issue # 261

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Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Fifth Circuit Reverses Trial Court’s Excusal of Area Representative’s Tardy Renewal Notice -...more

Lewitt Hackman

Franchisee 101: Shelf the Self-Help

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Lola Salamah and Amro Elsayed signed a franchise agreement with M.M. Fowler, Inc., the franchisor of Family Fare gas stations, to operate a gas station franchise in North Carolina. A few years into the franchise...more

Lewitt Hackman

FRANCHISOR 101: Not at Liberty to Compete

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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

Lewitt Hackman

Franchisor 101: No Need for Good Cause

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A Wisconsin federal judge granted summary judgment in favor of a food service and cleaning equipment maker (“Stoelting”), ruling that minimum purchase requirements under two dealer agreements were not a franchise fee under...more

Lewitt Hackman

Franchisor 101: Your Neighborhood Debtor

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A bankruptcy court has found that Applebee’s failed to properly terminate its franchise agreements prior to the franchisee petitioning for bankruptcy. Therefore, the franchise agreements remained in effect and were property...more

Lewitt Hackman

FRANCHISOR 101: Future Royalties and Beyond

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A Florida federal court refused to dismiss a franchisor's claim for past due royalties and lost future profits. The case concerned an Interim Healthcare staffing franchise in Arizona. The franchisor issued a default notice...more

Bowditch & Dewey

Beer Franchise Law: Can Brewers and Distributors Craft a Resolution?

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Three bills aimed at reforming Massachusetts’ controversial beer franchise law failed to make it out of committee this month, frustrating the efforts of brewers and beer distributors alike. Both sides will now go back to the...more

Lewitt Hackman

FRANCHISEE 101: Offer Too Little Too Late

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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

Troutman Pepper

When a Warehouse Is a 'Place of Business' Under the New Jersey Franchise Practices Act

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A recent federal court opinion overlooked a plain-language requirement of the “place of business” element of a claim under the New Jersey Franchise Practices Act (NJFPA), N.J.S.A. § 56:10-1 et seq., potentially expanding the...more

Troutman Pepper

Franchisor's Racial Animus Is Irrelevant in Determining Legality of Franchise Termination Under NJ Franchise Practices Act

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In a recent win for franchisor 7-Eleven, Inc., the U.S. Court of Appeals for the Third Circuit upheld a New Jersey district court’s ruling that 7-Eleven properly terminated its franchise agreements for cause based on the...more

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