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Breach of Contract Franchisee Franchises

Lathrop GPM

Arizona Federal Court Dismisses Franchisee’s Defamation Counterclaims Against Franchisor

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A federal court in Arizona recently dismissed a franchisee’s counterclaims for breach of contract, defamation, and injunctive relief against its former franchisor. LeTip World Franchise LLC v. Long Island Soc. Media Grp. LLC,...more

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California Federal Court Enforces Hotel Franchisor’s Arbitration Provision and Compels Arbitration

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A federal court in California recently granted a franchisor’s motion to compel arbitration and stay the lawsuit in a dispute alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and...more

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Arizona Federal Court Grants Franchisee Temporary Restraining Order to Prevent Termination

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A federal court in Arizona recently granted a franchisee’s motion for temporary restraining order preventing termination of its franchise agreement and the franchisor’s withdrawal of any funds from the franchisee’s accounts....more

Fox Rothschild LLP

Should the Litigation be in State or Federal Court?

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Deciding whether to choose state or federal court can be outcome determinative. This is particularly important in deciding to remove a case from state to federal court. Some state franchise statutes clearly allow a court to...more

Lathrop GPM

Kansas Federal Court Finds Personal Jurisdiction Over Franchisee’s Alleged Competitive Business in Unfair Competition Case

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In a franchisor’s suit against its franchisee and that franchisee’s new business, a federal court in Kansas recently denied the new business’ motion to dismiss for lack of personal jurisdiction. HappyFeet-Legends Int’l, Inc....more

Lathrop GPM

Minnesota Federal Court Grants Franchisor’s Motion for Preliminary Injunction for Noncompete and Lanham Act Violations by...

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A federal court in Minnesota recently granted franchisor Snap Fitness Inc.’s motion for preliminary injunction against an out-of-state franchisee that announced its intentions to open a competing gym during the term of the...more

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Florida Federal Court Finds Extension of Injunction Necessary to Protect Franchisor Rights

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A federal court in Florida recently held that extending a consent injunction was necessary to protect the interests of a franchisor. Tri-Cnty. Mobile Wash, Inc. v. B&C Wash Corp., 2024 WL 4379673 (S.D. Fla. Oct. 3, 2024)....more

Lathrop GPM

Tennessee Appellate Court Finds that Venue Clause in Franchise Agreement is Permissive and Not Mandatory

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The Tennessee Court of Appeals reversed a district court’s dismissal of a franchisee’s declaratory judgment claim, finding that the claim was properly brought in Tennessee.  Lakeway Real Estate2, LLC v. ERA Franchise Sys.,...more

Lathrop GPM

Franchisee’s Execution of Competing Franchise Agreement During Franchise Term Forecloses Claims Against Former Franchisor

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A federal court in New Jersey granted the franchisor of the Holiday Inn and Holiday Inn Express brands (Holiday Hospitality) summary judgment on former franchisee Scion Hotels’ complaint alleging violations of the New Jersey...more

Foley & Lardner LLP

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

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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

Lathrop GPM

Michigan Precedent on Michigan Franchise Investment Law Held to Trump Inconsistent Sixth Circuit Precedent on Private Right of...

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A federal court in Michigan recently granted several related franchisors’ motions to dismiss a franchisee’s claims for violations of the Michigan Franchise Investment law. Benjamin Franklin Franchising SPE LLC v. David...more

Foley & Lardner LLP

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

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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

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Illinois Federal Court Denies Cross Motions for Summary Judgment on Breach of Contract and Guaranty Claims Due to Ambiguity in the...

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A federal court in Illinois recently denied cross motions for partial summary judgment as to franchisor 360 Painting, LLC’s claims for breach of contract by painting franchisee R. Sterling Enterprises, Inc. (RSE), and breach...more

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Colorado Federal Court Denies Franchisee’s Motion to Dismiss on the Basis of Forum Non Conveniens Based on Forum Selection Clause...

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A federal court in Colorado denied WD Ventures, LLC’s motion to dismiss for forum non conveniens pursuant to the forum selection clause in the parties’ franchise agreement indicating that the parties contemplated federal...more

Fox Rothschild LLP

Georgia Court Finds Hooter’s Franchise Non-Compete Unreasonable in Geographic Scope

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A district court in Georgia recently granted a Motion for Preliminary Injunction filed by HOA Franchising, LLC’s, the franchisor of the Hooters restaurant chain (“Hooters”), against one of its former restaurant franchisees,...more

Lathrop GPM

California Court of Appeals Affirms Rejection of Reverse Royalty Damages in a Breach of Contract Action by Franchisee

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An appellate court in California has affirmed a trial court’s rejection of more than $4 million in lost business profits, which appellant Glen Suh alleged in a breach of contract action against franchisor Boba Time, Inc. Suh...more

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Illinois Federal Court Grants Franchisor’s Motion to Dismiss Terminated Franchisee’s Fraudulent Misrepresentation and Breach of...

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A federal court in Illinois recently dismissed a former franchisee’s counterclaims for alleged fraudulent misrepresentation, breach of contract regarding the franchisor’s advertising fund, and breach of contract and implied...more

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Virginia Federal Court Denies Franchisor’s Motion for Preliminary Injunction

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A federal court in Virginia denied a franchisor’s motion for preliminary injunction against a former franchisee violating the franchise agreement’s post-termination noncompete. JTH Tax, LLC v. Younan, 2023 WL 6304865 (E.D....more

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Florida Federal Court Denies Motion to Vacate Arbitration Award Brought by Franchisee Who Claimed Not to Have Notice of the...

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A federal court in Florida rejected a franchisee’s motion to vacate an arbitration award entered against it despite its arguments it did not have notice of the arbitration hearing. Your CBD Stores Franchising, LLC v....more

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Fifth Circuit Affirms Enforcement of Jury Trial Waiver in Franchise Transfer Agreement

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The Fifth Circuit Court of Appeals recently affirmed the enforcement of a jury trial waiver against a franchisee. Pizza Hut L.L.C. v. Pandya, 79 F.4th 535 (5th Cir. Aug. 22, 2023). Pizza Hut originally filed suit against...more

Lathrop GPM

Pennsylvania Federal Court Rules It Has Subject Matter Jurisdiction to Decide Trade Secret Claim but Dismisses as Untimely...

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A federal court in Pennsylvania granted in part and denied in part a former franchisee’s motion to dismiss a franchisor’s allegation that she misappropriated trade secrets and breached the franchise agreement. JTH Tax, LLC v....more

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Tenth Circuit Holds that Good Faith and Fair Dealing Claim Requires Expectation Created by Express Contract Terms

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The Tenth Circuit has ruled in favor of KFC in a dispute with a franchisee alleging a breach of the implied covenant of good faith and fair dealing. Kazi v. KFC US, LLC, 2023 WL 4983119 (10th Cir. Aug. 4, 2023)....more

Lathrop GPM

North Carolina Federal Court Rules That Franchise Agreement’s 1-Year Statute of Limitations Clause Barred Action Against...

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A federal court in North Carolina recently dismissed a complaint brought by Bigelow Corporation against its franchisor Hound Town USA because the claims were time barred. Bigelow Corporation v. Hounds Town USA, LLC, 2023 WL...more

Lewitt Hackman

Franchisor 101: A Broad Brush Addendum

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A Virginia district court dismissed a lawsuit filed by 360 Painting, a franchisor of residential and commercial painting services, concluding an addendum to the parties’ franchise agreement precluded 360 Painting’s claims for...more

Foley & Lardner LLP

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

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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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