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
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
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
On May 1, 2025, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) issued a Field Assistance Bulletin stepping back from a restrictive independent contractor rule issued under the Biden administration — a...more
5/13/2025
/ Department of Labor (DOL) ,
Enforcement Actions ,
Enforcement Guidance ,
Federal Labor Laws ,
Franchisors ,
Independent Contractors ,
Manufacturers ,
Misclassification ,
New Guidance ,
Regulatory Reform ,
State Labor Laws ,
Wage and Hour
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
3/27/2025
/ Acquisitions ,
Breach of Contract ,
Contract Terms ,
Due Diligence ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Litigation Strategies ,
Misappropriation ,
Motion to Dismiss ,
Tortious Interference ,
Trade Secrets
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
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
2/18/2025
/ Antitrust Provisions ,
Compliance ,
Contract Terms ,
Federal Trade Commission (FTC) ,
Franchise Agreements ,
Franchises ,
Franchisors ,
NASAA ,
Non-Compete Agreements ,
Restrictive Covenants ,
Trade Secrets
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
12/3/2024
/ Arbitration ,
Disclosure Requirements ,
Federal Trade Commission (FTC) ,
Franchise Agreements ,
Franchises ,
Franchisors ,
FTC Franchise Rule ,
Louisiana ,
Marketing ,
Misleading Statements ,
Motion to Compel ,
Personal Jurisdiction ,
Unfair or Deceptive Trade Practices ,
Washington
A franchisor may pursue claims for declaratory and injunctive relief for potential trademark infringement against a former prospective franchisee even though the prospect never actually used the marks in question. Grainier...more
9/25/2024
/ Breach of Contract ,
Consumer Fraud ,
Contract Negotiations ,
Counterclaims ,
Declaratory Rulings ,
Enforcement ,
Franchise Disclosure Document ,
Franchisee ,
Franchisors ,
Injunctive Relief ,
Intellectual Property Protection ,
Lanham Act ,
Promissory Estoppel ,
Trademarks ,
Unfair or Deceptive Trade Practices
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
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
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 franchisee, Functional HIIT Fitness, has filed suit in U.S. District Court in the Eastern District of Michigan against a franchisor, F45 Training Incorporated, and five of its officers: Adam Gilchrist, Robert Deutsch, Marc...more
In Acuff v. Dy N Fly, LLC, four female plaintiffs sued a franchisor of hair salons (Dy N Fly), two of its franchisees, and the owner of the two franchisees for wrongful retaliatory termination and sexual harassment in the...more
7/18/2023
/ Compensation ,
Employee Benefits ,
Franchises ,
Franchisors ,
Hostile Environment ,
Joint Employers ,
Motion to Dismiss ,
Retaliation ,
Severance Agreements ,
Sexual Harassment ,
Wrongful Termination
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
On March 10, 2023, the Federal Trade Commission (FTC) notified the public it is seeking comments from franchisors, franchisees, and other related parties about franchise agreements, franchisor business practices, and how...more
In Travelodge Hotels, Inc. v. Durga, LLC, a hotel franchisor, Travelodge Hotels, Inc. (Travelodge), sued Durga LLC and its sole member (Durga), a hotel franchisee, in the U.S. District Court for the District of New Jersey,...more
A case between a franchisor and franchisee in the U.S. District Court for the District of Minnesota offers guidance on interpreting Minnesota’s Franchise Act. In LG2, LLC v. American Dairy Queen Corp., LG2, LLC (LG2), a Dairy...more
A federal court in Massachusetts granted summary judgment in favor of a franchisor in a long-running case against its franchisees. In Patel et al. v. 7-Eleven, Inc., five 7-Eleven store owners brought suit claiming 7-Eleven...more
The Eleventh Circuit Court of Appeals recently issued an opinion concerning a dispute over a franchisor’s effort to mandate changes to a franchisee’s operations. The Court granted the franchisor a mixed result. The decision...more
For the first time in over a decade, the Federal Trade Commission is considering changes to its Franchise Rule. The Rule represents an effort by the Commission to prevent unfair and deceptive practices by franchisors against...more
One of the most important tools manufacturers and franchisors have available to manage their networks are the agreements they sign with their channel partners. Significant time and effort go into those contracts, ensuring...more
A significant amount of legal activity has taken place recently in the area of joint employment. Joint employment exists when more than one entity is deemed to be a worker’s employer. Typically, a direct employer and a...more
2/6/2020
/ Department of Labor (DOL) ,
Employer Liability Issues ,
Equal Employment Opportunity Commission (EEOC) ,
Fair Labor Standards Act (FLSA) ,
Federal Labor Laws ,
Final Rules ,
Franchisee ,
Franchises ,
Franchisors ,
Hiring & Firing ,
Joint Employers ,
NLRB ,
Wage and Hour