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
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
In Curry v. Equilon Enterprises LLC, a California court ruled, and the Court of Appeal affirmed, that a class-action wage and hour lawsuit against Shell Oil could not go forward because the service station manager bringing...more
A recent case from Indiana demonstrates consequences to a franchisor that deviates from the contractually agreed audit method. In Noble Roman's Inc. v. Hattenhauer Distributing Co., an Indiana federal court granted a pizza...more
A Florida federal court refused to dismiss a franchisor's claim for past due royalties and lost future profits.
The case concerned an Interim Healthcare staffing franchise in Arizona. The franchisor issued a default notice...more
4/30/2018
/ Breach of Contract ,
Contract Termination ,
Contract Terms ,
Failure To Pay ,
Franchises ,
Franchisors ,
Future Royalties ,
Lost Profits ,
Motion to Dismiss ,
Notice of Default ,
Pleadings ,
Royalties
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
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 registered trademark is a valuable corporate asset and can be a significant part of a company's worth. A franchisor has an affirmative legal duty to police use of its mark by licensed franchisees and also third-party...more
2/2/2018
/ Cease and Desist ,
Duty to Monitor ,
Franchisee ,
Franchises ,
Franchisors ,
Injunctions ,
Likelihood of Confusion ,
Restaurant Industry ,
Trademark Infringement ,
Trademark Registration ,
Trademarks
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