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Texas Supreme Court Limits Franchisor Liability in Franchisee Sexual Assault Case

On May 2, 2025, the Texas Supreme Court held that a franchisor owes no duty of care for injuries caused by a franchisee’s employee unless the franchisor retained or exercised control over the hiring of that employee....more

Federal Court Enjoins Former Franchisees and Two Related Entities from Competing Against Franchisor

A federal court recently granted in part and denied in part a franchisor’s motion to enjoin the post-termination activities of its former franchisees and two related entities. Rooterman, LLC is a plumbing services franchisor....more

Stick to the Status Quo: TRO Stops Franchisor from Terminating Franchise Agreement Pending Motion to Transfer

A federal court recently enjoined a franchisor from terminating a franchise agreement or interfering with a franchisee’s operations pending the resolution of the franchisor’s motion to transfer venue....more

Franchise Agreement Requiring Out of State Mediation Is Unenforceable in California Background

Dispute resolution provisions in franchise agreements often address how, when, and where parties will mediate. However, the enforceability of these provisions can change depending on the law of the state governing the...more

Keep Wining: Franchise Statute Opens Door to Protections for Missouri Wine Distributor

The Eighth Circuit recently applied a novel, broad reading of the Missouri Franchise Act granting franchise protection to distributors which previously would not likely have been considered franchisees....more

SBA Franchise Directory Reinstated, Easing Loan Access for Franchisees

Effective June 1, 2025, the U.S. Small Business Administration (SBA) will reinstate its Franchise Directory, a critical development for franchise systems and franchisees seeking SBA financing. Originally launched in 2018 and...more

Actions Speak Louder Than Words: A Franchise Relationship Can Exist in Spite of a Contract’s Express Terms to the Contrary

In OTG New York, Inc. v. Ottogi America, Inc., OTG was the exclusive regional distributor for food company Ottogi from 2008–23, during which Ottogi shipped inventory to OTG’s New Jersey warehouse. In 2024, Ottogi terminated...more

Court Relies on Contractual Terms to Dismiss Dealership Suit Against Auto Manufacturer

Decozen Chrysler Jeep Corp. (“Decozen”), a New Jersey-based automobile dealership, filed a lawsuit against Fiat Chrysler Automobiles, LLC (“FCA”), in U.S. District Court for the District of New Jersey alleging that FCA...more

Permissive Forum Selection Clause Is Not Enforceable in Franchisor’s Suit Against Franchisee

A key term of any franchise agreement is the venue selection clause as this page has previously explained. This issue was at the forefront of Convenience Stores Leasing & Management, LLC’s (“CSLM”) August 2024 suit...more

Clear Terms of Franchise Agreement Are Enforced Against Franchisee

A recent federal court decision in T&T Management, Inc. v. Choice Hotels, Inc. underscores key contractual and operational considerations for franchisors. T&T filed suit in U.S. District Court for the District of Minnesota...more

Guidance for Franchisors: Lessons from N.A.R., Inc. v. Eastern Outdoor Furnishings

A recent New Jersey appellate court decision provides valuable guidance for franchisors and their in-house legal teams on structuring and protecting franchise relationships. The court affirmed that a terminated retailer of...more

Navigating Non-Compete Agreements: Key Considerations for In-House Counsel in Franchise Businesses

In May of last year, the Federal Trade Commission (FTC) sought to ban non-compete agreements in most employment contracts. Franchise agreements were an exception. However, before the rule could take effect in September, a...more

A Lucid Interpretation of “Affiliates” under Washington’s Franchise Act

A Washington state appeals court has clarified the scope of Washington’s Franchise Act in Lucid Group USA, Inc. v. State of Washington, Department of Licensing. There, Lucid Group USA, Inc. (“Lucid Group”), the dealer, wanted...more

Louisiana Based Franchisor and Its Employees Cannot Avoid Personal Jurisdiction in Washington State

Washington-state based franchisees Greg and Gabriela Skistimas brought suit against Hotworx Franchising LLC in the U.S. District Court for the Western District of Washington alleging misleading and unfair practices related to...more

Manufacturer and Distributor’s Relationship Is Not a Franchise Under Connecticut Law

The Superior Court of Connecticut addressed a contractual dispute between a manufacturer of snow removal equipment and its distributor. HP Fairfield, a distributor of snow removal equipment, argued that a manufacturer, CIVES...more

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

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

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

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

Federal Trade Commission Issues Policy Statement on Franchisors’ Use of Non-Disparagement, Goodwill, and Confidentiality Clauses...

On July 12, 2024, the Federal Trade Commission (FTC) issued a policy statement regarding franchisors’ use of contract provisions such as non-disparagement, goodwill, and confidentiality clauses. This is another example of the...more

Franchise Agreements’ Arbitration Clauses Are Enforced Over Forum Selection Clauses in Subsequent Agreements with Franchisor

Franchise agreements’ arbitration clauses are enforceable even when subsequent agreements between the same parties contain forum selection clauses requiring litigation in different forums. Additionally, a trial court’s...more

Federal Court Denies Attempt to Broaden Interpretation of the New Jersey Franchise Practices Act

The U.S. District Court for the District of New Jersey refused a franchisee’s attempt to broaden the protections of the New Jersey Franchise Protection Act. William Minnebo and Philly Metal Supply LLC entered into a franchise...more

Distributor’s Claims Against Manufacturer Under Puerto Rican Law Are Denied

Lyvette Mercado Velez, a dietitian, entered into a distribution agreement with Insulet Corporation, a leading medical device manufacturer, to promote and sell diabetes treatment products and services in Puerto Rico. Shortly...more

Federal Court Holds That Franchisee’s Owner Can Be Individually Bound by Franchise Agreement

In Alamo Intermediate II Holdings, LLC. v. Birmingham Alamo Movies, the U.S. District Court for the Western District of Texas, denied franchise owner Hunter Renfroe’s motion to dismiss for lack of personal jurisdiction. The...more

Federal Court Protects Franchisor’s Rights Pursuant to Clear Terms of Franchise Agreement

In Bank United, NA v. GC of Vineland, LLC, Karen and William Scism and GC Vineland, LLC (“GVC”) (collectively the “Scism Parties”) filed a complaint in the U.S. District Court for the District of New Jersey against Golden...more

LeTip World Franchise LLC v. Long Island Social Media Group LLC

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

Court Looks at What a Franchise Is Under the Minnesota Franchise Act

In Louis Degidio, Inc. v. Industrial Combustion, LLC, Louis Degidio, Inc. (Degidio) and Louis Degidio Services, Inc. (Degidio Services) sued Industrial Combustion, LLC (IC), a manufacturer of “institutional boiler system”...more

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