Twin City Lodging LLC bought a Best Western Hotel in Mankato, Minnesota, then entered into a “Membership Agreement” with Best Western International. Best Western granted Twin City a license to operate the hotel under Best...more
10/1/2019
/ Best Western ,
Breach of Contract ,
Community of Interest ,
Counterclaims ,
Franchise Fees ,
Franchise Termination ,
Franchisee ,
Franchises ,
Franchisors ,
Hotels ,
Licenses ,
Motion to Dismiss ,
Notice Requirements ,
Trademark Infringement
A federal appeals court upheld a lower court’s refusal to order arbitration against a franchisee who bought an existing franchise. This was despite a provision in the franchise agreement to arbitrate “most disputes.”...more
A gasoline franchisee defeated a motion to dismiss brought by its franchisor, seeking to avoid a claim under the federal Petroleum Marketing Practices Act (PMPA). In 2018, Global Companies (Global) sent the franchisee a...more
9/1/2019
/ Franchise Agreements ,
Franchisee ,
Franchisors ,
Motion to Dismiss ,
Notice of Non-Renewal ,
Oil & Gas ,
Petroleum Marketing Practices Act (PMPA) ,
Purchase Agreement ,
Right of First Refusal ,
Sales & Distribution Agreements ,
Sales Contracts ,
Third Party Purchaser (TPP) ,
Unfair Contract Terms ,
Written Notice
The Mississippi Supreme Court ruled that a beer manufacturer’s “match and redirect” provision in an agreement with a wholesaler violated the state’s Beer Industry Fair Dealing Act (BIFDA). Anheuser-Busch’s contract said if...more
8/29/2019
/ Anheuser-Busch ,
Beer ,
Beverage Manufacturers ,
Civil Conspiracy ,
Contract Terms ,
Distributors ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
MS Supreme Court ,
Redirect ,
State Law Claims ,
Tortious Interference ,
Unenforceable Contract Terms ,
Unfair Dealing ,
Wholesale ,
Wine & Alcohol
Ten years after the franchisor of the EXIT real estate system entered into a franchise agreement for a franchisee to operate an EXIT franchise in Maitland, Florida, the parties entered into another franchise agreement for a...more
7/31/2019
/ Appeals ,
Breach of Contract ,
Damages ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Fraud ,
Oral Contracts ,
Promissory Estoppel ,
Real Estate Transactions ,
Reversal ,
Statute of Frauds ,
Unjust Enrichment ,
Void and Unenforceable ,
Written Agreements
In a wrongful death suit by a Massachusetts wife of a man and their child who drowned in a Montreal hotel pool, a Massachusetts federal court held in Nandjou v. Marriott Internationalthat it had jurisdiction under the state...more
Eskimo Hut, a franchisor of convenience stores that sell frozen daiquiris-to-go, convinced a Texas appellate court that it would probably win on claims that South Plains, a franchisee using a nonconforming drink mix, breached...more
On May 20, 2019, the U.S. Supreme Court ruled that a bankrupt debtor’s “rejection” of a trademark licensing agreement does not terminate the licensee’s rights. This was under a part of the Bankruptcy Code that provides for...more
6/3/2019
/ Bankruptcy Code ,
Breach of Contract ,
Commercial Bankruptcy ,
Debtors ,
Executory Contracts ,
Franchisee ,
Franchisors ,
IP License ,
Mission Product Holdings Inc v Tempnology LLC ,
Rescission ,
Reversal ,
SCOTUS ,
Split of Authority ,
Trademark Licenses ,
Trademarks
The Ninth Circuit sent shockwaves through the franchise industry in ruling that last year’s California Supreme Court decision broadening who may bring wage misclassification claims (Dynamex v. Superior Court) applied...more
6/1/2019
/ ABC Test ,
Appeals ,
CA Supreme Court ,
Employer Liability Issues ,
Franchisee ,
Franchises ,
Franchisors ,
Indemnification ,
Independent Contractors ,
Joint Employers ,
Misclassification ,
Remand ,
Retroactive Application ,
Reversal ,
Statute of Limitations ,
Wage and Hour
A 7-Eleven franchisee of more than 40 years brought claims that the convenience store franchisor engaged in a region-wide scheme, dubbed “Operation Philadelphia,” to force older franchisees to terminate their franchise...more
5/2/2019
/ 7-Eleven ,
Breach of Contract ,
Bullying ,
Debit and Credit Card Transactions ,
Failure to Notify ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Independent Contractors ,
Investment Schemes ,
Transaction Fees
The U.S. Sixth Circuit Court of Appeals upheld summary judgment for franchisor Buffalo Wild Wings (“BWW”) rejecting a restaurant operator’s counterclaims for wrongful termination, malicious prosecution, and breach of...more
5/1/2019
/ Abeyance ,
Breach of Contract ,
Counterclaims ,
Declaratory Rulings ,
Franchise Agreements ,
Franchisors ,
License Agreements ,
Licensees ,
Malicious Prosecution ,
Notice of Default ,
Restaurant Industry ,
Summary Judgment ,
Trademark Licenses ,
Wrongful Termination
A federal district court upheld an arbitration panel’s decision to deny attorneys’ fees to Benihana, even though Benihana won a dispute with its licensee. The licensee started arbitration claiming Benihana breached the...more
3/29/2019
/ Appeals ,
Arbitration ,
Arbitration Awards ,
Attorney's Fees ,
Breach of Contract ,
Contract Termination ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Good Cause ,
License Agreements ,
Licensees ,
Prevailing Party ,
Reaffirmation ,
Restaurant Industry
Employees of a Merry Maids home cleaning franchise brought a class action against the franchisee, the franchisor, its owner and affiliated entities claiming they were joint employers. A California federal district court...more
3/2/2019
/ Agency Relationship ,
Class Action ,
Employee Handbooks ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Genuine Issue of Material Fact ,
Joint Employers ,
Labor Law Violations ,
Minimum Wage ,
Reasonable Belief Test ,
Right to Control ,
State Labor Laws ,
Summary Judgment ,
Unpaid Overtime ,
Unpaid Wages ,
Wage and Hour
Hot dog franchisor, Charlie Graingers, was unable to obtain dismissal of a federal lawsuit brought by franchisees alleging fraud, misrepresentation and breach of fiduciary duty....more
2/28/2019
/ Breach of Duty ,
Federal Trade Commission (FTC) ,
Fiduciary Duty ,
Franchise Agreements ,
Franchise Disclosure Document ,
Franchisee ,
Franchisors ,
Fraud ,
Misrepresentation ,
Motion to Dismiss ,
Release Agreements
Sandwich shop franchisor Erbert and Gerbert (“E&G”) was unable to demonstrate a “better than negligible” likelihood of succeeding on allegations that a former franchisee infringed its trade dress in establishing a new...more
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
12/28/2018
/ Applebee's ,
Commercial Bankruptcy ,
Contract Termination ,
Contract Terms ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Notice of Default ,
Right To Cure ,
Royalties
When you pay your phone bill, part of the taxes go into a fund used by the government to subsidize cell phone service to qualifying individuals, under federal and state Lifeline programs. Phones typically reach the end...more
12/3/2018
/ Arbitration ,
Arbitration Awards ,
Attorney's Fees ,
Cell Phones ,
Contract Termination ,
Dealerships ,
Fee-Shifting ,
Franchise Agreements ,
Franchise Fees ,
Franchisee ,
Franchisors ,
IP License ,
Lifeline Program
Most franchisors’ annual franchise registration renewal deadlines are a few months away. Nevertheless, franchisors should contact their accountants now regarding a new revenue recognition rule issued by the Financial...more
11/30/2018
/ Accountants ,
FASB ,
Financial Reporting ,
Franchise Agreements ,
Franchise Fees ,
Franchisee ,
Franchises ,
Franchisors ,
IP License ,
Registration Requirement ,
Training
A state appellate court (“Court”) in New Mexico upheld a decision by the state’s Taxation and Revenue Department (“Department”) that royalties paid to out-of-state franchisors are subject to the state’s gross receipts tax...more
A federal Appeals Court has held that an offer to extend a franchisee’s buyback period lacked consideration required to form an enforceable contract and, instead, was an unenforceable gratuitous promise by the franchisor....more
An ice cream parlor franchisor in Ohio, Handel Enterprises, Inc., must defend claims that it violated the California Franchise Investment Law (CFIL) for failing to disclose its amended franchise disclosure document (FDD) to a...more
Jimmy John’s will face antitrust claims, after an Illinois federal judge declined to dismiss allegations in a class action.
Plaintiffs claim the chain’s franchise agreement harmed competition by preventing franchisee...more
9/28/2018
/ Anti-Competitive ,
Antitrust Violations ,
Class Action ,
Enforcement Actions ,
Franchisee ,
Franchises ,
Franchisors ,
Motion to Dismiss ,
No-Hire/No-Solicitation Agreements ,
No-Poaching ,
Non-Compete Agreements ,
Restaurant Industry ,
State Attorneys General
A Tennessee federal judge granted a preliminary injunction in favor of AmeriSpec, a national franchisor of property inspection services, enforcing a one-year post-termination covenant not to compete against its former...more
Tax service franchisor, H&R Block, was recently vindicated in having terminated a franchisee for violating an in-term non-compete covenant. A United States District Court granted the franchisor summary judgment in Devore v....more
8/2/2018
/ Breach of Contract ,
Commercial Leases ,
Competition ,
Contract Termination ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
H&R Block ,
Marijuana Related Businesses ,
Non-Compete Agreements ,
Office Space ,
Royalties ,
Summary Judgment ,
Termination Clauses ,
Tortious Interference
In May, the U.S. Supreme Court held that mandatory arbitration agreements containing class action or collective action waivers must be enforced as written....more
6/29/2018
/ Arbitration ,
Arbitration Agreements ,
Class Action ,
Class Action Arbitration Waivers ,
Collective Bargaining ,
Employment Contract ,
Epic Systems Corp v Lewis ,
Federal Arbitration Act ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
NLRA ,
NLRB ,
Preemption ,
Private Attorneys General Act (PAGA) ,
Remand ,
Reversal ,
Savings Clause ,
SCOTUS