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
1/31/2019
/ Contract Termination ,
Dealerships ,
Franchise Agreements ,
Franchise Fees ,
Franchise Termination ,
Franchises ,
Good Cause ,
Manufacturers ,
Minimum Purchase Requirements ,
Purchase Agreement ,
Summary Judgment ,
Wholesale ,
Written Notice
An ex-franchisee of a vehicle transportation and shipping management franchise was enjoined by a federal court, for two years, from operating a competitive business at its former location in Virginia or anywhere the...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 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
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
On June 21 the U.S. Supreme Court reversed prior case law and let states tax online retailers that do not have physical presence in the state. The ruling also has significant implications for franchise systems that sell...more
6/28/2018
/ Appeals ,
Commerce Clause ,
Constitutional Challenges ,
Franchise Agreements ,
Franchises ,
Franchisors ,
Internet Retailers ,
Interstate Commerce ,
Out-of-State Companies ,
Physical Presence Test ,
Quill ,
Reversal ,
Royalties ,
Sales & Use Tax ,
SCOTUS ,
South Dakota v. Wayfair ,
Substantial Nexus
Structuring a franchise to reduce risk of joint employment and vicarious liability means limiting a franchisor's control over franchisees. This is a challenge in a professional services franchise, where the brand is...more
4/2/2018
/ Code of Conduct ,
Control Test ,
Employee Misconduct ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Fraud ,
Joint Employers ,
Professional Services Contract ,
Tax Preparers ,
Vicarious Liability
A franchisee looking to transfer assets of a franchised business may be subject to the franchisor's right of first refusal, the franchisor's option to purchase the business, or both, depending on the language of a franchise...more
Though an individual owner and operator of a formerly franchised Church's Chicken restaurant in Texas was not a signer of the franchise agreement, a district court ruled the individual was subject to the agreement's...more
3/1/2018
/ Assignments ,
Breach of Contract ,
Cease and Desist ,
Confusingly Similar ,
Equitable Estoppel ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Motion To Enjoin ,
Non-Compete Agreements ,
Non-Signatories ,
Post-Termination Acts ,
Restaurant Industry ,
Third-Party Relationships ,
Trademark Infringement ,
Trademarks
Franchise agreements give franchisors nearly absolute, unfettered discretion to control advertising of their brands. Franchisors need not regard prior course of dealings with franchisees. An Illinois federal court dismissed a...more
2/28/2018
/ Advertising ,
Attorney's Fees ,
Breach of Contract ,
Contract Terms ,
Corporate Branding ,
Dietary Guidelines ,
Dismissals ,
Fee-Shifting ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Islamic-Compliant ,
Kentucky Fried Chicken ,
Prior Express Consent ,
Promissory Estoppel ,
Revocation
A California federal judge held that breach of contract claims brought by franchisees of two ARCO-branded gas stations against their franchisor BP West Coast Products were untimely, and declined to adopt the franchisees'...more
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
On December 14, 2017, the National Labor Relations Board (Board) in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017) expressly overruled the divisive joint-employer standard adopted by Browning-Ferris...more
Some creativity can help in passing a former franchised business to the next generation, particularly if the franchisor has no part in the franchisee's succession plan.
A federal court in Nebraska preliminarily enjoined...more
A restaurant franchisor, World of Beer Franchising ("WOB"), recently lost an appeal to enforce a post-termination restriction against a franchisee launching a competing business. Both the trial and appellate court ruled...more
12/1/2017
/ Appeals ,
Dispute Resolution Clauses ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Injunctive Relief ,
Mandatory Arbitration Clauses ,
Mediation ,
Non-Compete Agreements ,
Remedies ,
Restaurant Industry ,
Restrictive Covenants
Baskin-Robbins charges a dairy supplier a so-called "commercial factor" fee for the right to make and sell Baskin-Robbins proprietary ice cream to franchisees. The supplier's pricing to franchisees includes an amount equal to...more
A federal court in New Jersey granted a franchisor's motion to compel arbitration of disputes involving seven frozen yogurt franchises, even though the claims were subject to different arbitration provisions in different...more
11/3/2017
/ American Arbitration Association ,
Arbitration ,
Breach of Contract ,
Conflicting Proposals ,
Contract Terms ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Insolvency ,
Liquidation ,
Motion to Compel ,
Unjust Enrichment
A federal court recently held that under California law, cleaning services franchisor Jan-Pro Franchising International (Jan-Pro) was not the employer of its unit franchisees. The franchisee plaintiffs failed to show that...more
A federal court in New York denied a franchisee's motion for preliminary injunction that would have prevented its franchisor Metal Supermarkets Franchising America (MSFA) from installing technology upgrades in its stores....more
Most dealership and franchise agreements require the franchisor's prior written consent to the transfer of a business from one franchisee to another. The new franchisee is often required to sign the franchisor's then-current...more
8/31/2017
/ Assignments ,
Attorney's Fees ,
Breach of Contract ,
Coercion ,
Consent to Assignment ,
Dealerships ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Oil & Gas ,
Purchasers ,
Sellers ,
Written Consent