News & Analysis as of

Franchises

Faegre Drinker Biddle & Reath LLP

Minnesota Supreme Court Holds the Minnesota Franchise Act Does Not “Categorically Preclude” Enforcement by Out-of-State...

On September 11, 2024, the Minnesota Supreme Court issued an opinion holding that the Minnesota Franchise Act (MFA) does not “categorically preclude an out-of-state company from enforcing a claim for unfair practices” under...more

Foley & Lardner LLP

Manufacturer Acted Reasonably in Terminating a Franchisee for Failure to Abide by Agreement

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Tasty Baking Company (“Tasty”), a manufacturer of prepackaged goods, terminated Distefano, Inc. (“Distefano”), Maryland-based owner of a franchise with rights to sell Tasty products in a prescribed area called a “route.”...more

Lathrop GPM

Ohio Appellate Court Reverses Summary Judgment Holding Regarding Applicability of Area Representative Agreement to Individuals

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An Ohio appellate court, reversing a summary judgment decision, recently held that the “full-time efforts” section of an Area Representative Agreement was applicable only to the area representative entity and not the...more

Lathrop GPM

Michigan Federal Court Grants Franchisor’s Motion for Preliminary Injunction Against Former Restoration Service Franchisee

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A federal court in Michigan has granted a franchisor’s motion for preliminary injunction against former franchisees for violating the franchise agreements’ post-termination noncompete provisions. 1-800 Water Damage Int’l LLC...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

Appellate Court in Pennsylvania Affirms Ruling on Gas Station Franchisor’s Indemnification Claims

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A state appellate court in Pennsylvania recently affirmed a trial court’s summary judgment ruling addressing a franchisor’s claims for indemnification in a personal injury dispute. Sunoco (R&M), LLC v. Pa. Nat'l Mut. Cas....more

Lathrop GPM

Virginia Federal Court Rules It has Subject Matter Jurisdiction Over DTSA Claim Because Foreign Bankruptcy Proceeding Only Stayed...

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A federal court in Virginia recently ruled that it had federal question subject matter jurisdiction over a Defend Trade Secrets Act (DTSA) claim, rejecting Defendants’ argument that a foreign bankruptcy proceeding stayed the...more

Lathrop GPM

Washington Federal Court Grants Home Healthcare Services Franchisor’s Motion to Compel Arbitration in Accordance with the...

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A federal court in Washington recently granted a motion brought by franchisor Nurse Next Door Home Healthcare Services, Inc. (NND) to compel arbitration of a Florida-based franchisee’s claims. Nurse Next Door Home Healthcare...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Massachusetts Supreme Judicial Court Clarifies Franchisee vs. Employee Classification

In the ever-evolving landscape of employment law, a recent Massachusetts Supreme Judicial Court (SJC) opinion, Patel v. 7-Eleven, Inc., has shed light on a critical question: When is a franchisee considered an employee of the...more

Proskauer - Tax Talks

California Franchise Tax Board (FTB) to Apply Market-Based Sourcing Rules to Nonresident Directors of California Based...

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On Monday, September 9, 2024, the California FTB approved proposed amendments to California’s personal income tax code. This proposed rule would impose California income tax on non-resident/non-employee corporate...more

Foley & Lardner LLP

Franchisee Claims for Promissory Estoppel and Violations of the Michigan Franchise Investment Law Fail

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A recent court decision explained the circumstances under which a plaintiff may assert a claim for promissory estoppel and whether a private right of action exists for a certain alleged violation of the Michigan Franchise...more

Morgan, Brown & Joy, LLP

Supreme Judicial Court Rules That Typical Franchise Operators Are Independent Contractors, Not Employees

On September 5, 2024, the Massachusetts Supreme Judicial Court (“SJC”) held that 7-Eleven franchisees operating in a “typical” franchisor-franchisee relationship were independent contractors and not “employees” of 7-Eleven,...more

Holland & Knight LLP

Private Equity's Time on the Bench Is Over: NFL Owners Allow Private Equity Fund Investments

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Private equity funds have been patiently waiting on the sidelines for their chance to invest in the NFL, and they have finally been called off the bench to show what they can do. Every NFL team owner except for one has voted...more

Locke Lord LLP

Some Individuals Acting as Franchisees Are Independent Contractors Under Massachusetts’ Strict Classification Test

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7-Eleven has been defending its position for years that individuals operating as franchisees of its retail stores in Massachusetts are not employees under that state’s strict Independent Contractor Law but rather are exempt...more

Akin Gump Strauss Hauer & Feld LLP

Institutional Investments in Sports: Fueling Revenue and Valuation Growth

There was a time when ownership of a professional sports franchise was not regarded as a serious business venture. Owning a team, even in one of the major leagues in North America, was regarded as more of a frolic and detour,...more

Freeman Law

Texas Franchise Tax Basics | Nexus

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If you own a business in Texas, you’ve likely encountered (for better or worse) the Texas franchise tax. The franchise tax is a tax imposed on any “taxable entity” that does business in Texas or that is chartered or...more

Faegre Drinker Biddle & Reath LLP

NLRB Withdraws Appeal of Joint Employer Rule Decision

Last week, the National Labor Relations Board (NLRB) withdrew its bid to save its new joint employer rule, which would have treated some entities as joint employers with their contractors or franchises, even when those...more

Parker Poe Adams & Bernstein LLP

NLRB Waves White Flag on Expansion of Joint Employer Definition

Last week, the National Labor Relations Board withdrew its appeal of a federal court decision that blocked its 2023 rule that significantly expanded the definition of joint employment under federal labor law....more

Benesch

NLRB Rule Vastly Expanding Joint Employer Risk Under the National Labor Relations Act is Vacated Before Taking Effect (Updated...

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Update: Since the alert below was issued on March 13, 2024, the National Labor Relations Board (the “Board”) appealed the lower court’s decision to the Fifth Circuit Court of Appeals. On July 19, 2024, the Board filed an...more

Morgan Lewis

FTC Expands Its Focus on Franchising Regulation with New Policy Statement and Staff Guidance

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The Federal Trade Commission (FTC) on July 12, 2024 released a policy statement warning that the use of contract provisions that prohibit franchisees from communicating with the government about legal violations are unlawful....more

Orrick, Herrington & Sutcliffe LLP

FTC reminds industries of its enforcement of the Franchisee Rule

On July 12, the FTC released a new policy statement, staff guidance, and an issue spotlight about allegedly unfair and deceptive practices by franchisors. The policy statement addressed the FTC’s concerns that franchisees...more

Cozen O'Connor

FTC Announces New Efforts Targeting Unfair and Deceptive Franchisor Practices

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The FTC announced that it has taken multiple actions to address growing concern about unfair and deceptive practices by franchisors. The FTC released a Policy Statement on Franchisors’ Use of Contract Provisions, Including...more

Lathrop GPM

FTC Takes Action Impacting the Franchise Relationship

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On Friday, July 12, 2024, the Federal Trade Commission (“FTC”) published an analysis of the information it received in response to its Request for Information related to  franchisors’ business practices, launched in March...more

Seyfarth Shaw LLP

Recent Illinois Board Decision Reinforces Need for Vigilance on Dealer Agreement Renewals - Seyfarth's Future of Automotive Series

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A recent decision of the Illinois Motor Vehicle Board (the “Board”) reinforces why auto manufacturers need to ensure they have a proactive process in place to address the timely renewal of expiring dealer agreements. Based on...more

Troutman Pepper

The FTC Intervenes in Franchise Relationships

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The U.S. Federal Trade Commission's (FTC) latest policy statement aims to dictate the outcome of contract negotiations between franchisors and their franchisees and to limit the potential negative impact on franchisees of...more

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