News & Analysis as of

Breach of Contract Franchisors Non-Compete Agreements

Lathrop GPM

Missouri Federal Court Denies Franchisor’s Request for Temporary Restraining Order for Alleged Violation of Noncompete

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A federal court in Missouri recently denied franchisor Three Dog Bakery, LLC’s request for a temporary restraining order (TRO) against its former franchisee, J.L.E.T. Enterprises SWF, LLC, and its owners, Joseph and Lynette...more

Lathrop GPM

Missouri Federal Court Grants Franchisor’s Motion for Preliminary Injunction for Alleged Violation of Noncompete

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A federal court in Missouri recently granted a franchisor’s motion for a preliminary injunction, finding that the franchisee’s operation of a competing business demonstrated irreparable harm. Three Dog Bakery, LLC v. Crit,...more

Lewitt Hackman

Franchisee 101: Dog Days of Operations

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A federal court in Missouri granted franchisor’s motion for preliminary injunction against its former franchisee, enjoining the former franchisee from operating a competing business from the former franchised location....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

Lewitt Hackman

Franchisee 101: No Spice; No Injunction

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A Colorado federal court denied a franchisor’s request for preliminary injunction that would enforce a non-compete provision against a former franchisee. The franchisor of spice and tea shops known as Spice & Tea Merchants...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

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

Lewitt Hackman

Franchisor 101: Getting Away With Tax (Franchisor) Evasion

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A Pennsylvania federal court refused to enforce non-competition and non-solicitation covenants in a franchise agreement of a nationwide tax preparation service franchisor. The court dismissed the franchisor’s request for...more

Lathrop GPM

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

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

Lewitt Hackman

Franchisee 101: Blown Dry by the Competition

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A Minnesota bankruptcy court granted Fantastic Sams a preliminary injunction against a former Fantastic Sams franchisee, finding the operation of four new hair salons by the former franchisee was prohibited by enforceable...more

Bradley Arant Boult Cummings LLP

LADR Case Notes (August 2022-October 2022) and FLJ Currents (Winter 2023)

A gym franchisor recently secured a preliminary injunction against its former franchisee prohibiting the franchisee from operating an independent gym on the same location and using the franchisor’s trade secrets. Chris...more

Lathrop GPM

Minnesota Bankruptcy Court Enjoins Franchisee’s Breach of Post-Termination Noncompete

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A Minnesota bankruptcy court granted Fantastic Sams summary judgment and enjoined a former franchisee from violating the post-termination noncompete in its franchise agreements after the franchisee rejected the agreements in...more

Lewitt Hackman

Franchisor 101: Court Hits Brakes on Former Franchisees

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An Ohio appellate court upheld the state trial court’s decision to grant a permanent injunction against two former franchisees of an auto body shop franchise working for a competitor in violation of the franchise agreement’s...more

Lewitt Hackman

Franchisor 101: No Repairing Delayed Filing

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A New Jersey federal court denied a franchisor’s motion for preliminary injunction against a franchisee due to franchisor’s 11 month delay in bringing the motion. Franchisee entered into two franchise agreements with H-1 Auto...more

Lathrop GPM

Franchise Memorandum - Issue #270

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Second Circuit Affirms Dismissal of Franchisees’ Minimum Wage and Unjust Enrichment Claims - A divided panel of the Second Circuit Court of Appeals has concluded that claims of improper wage deductions and unjust...more

Lewitt Hackman

Franchisor 101: Competing With a Non-Compete Covenant?

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A federal court in Louisiana granted a preliminary injunction against a former franchisee of Liberty Tax Service for breaching post-termination covenants under a franchise agreement. Liberty Tax entered into franchise...more

Lathrop GPM

The Franchise Memorandum - Issue # 267

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Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Missouri Federal Court Holds Franchisor Controls Sufficient to Survive Motion to Dismiss...more

Lewitt Hackman

Franchisee 101: Fitness Franchisee Exercises Poor Judgment

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A federal court in Denver granted Fitness Together Franchise, LLC a preliminary injunction against the owner of three former franchisees, three former franchisee entities and three additional entities formed to operate a...more

Lathrop GPM

The Franchise Memorandum - Issue # 259

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Colorado Federal Court Applies Forum Selection Clause to Non-Signatory Entities Controlled by Former Franchisees - A federal court in Colorado held that entities controlled by former franchisees were bound by the forum...more

Lewitt Hackman

Franchisee 101: Successor Slips Out of Non-Compete

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A Florida federal court granted a preliminary injunction against a terminated franchisee. The court enjoined the ex-franchisee from using the franchisor’s trademarks and trade dress. The court enforced the franchisor’s...more

Lewitt Hackman

Franchise 101: A Sticky Situation

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A federal court in Maryland entered default judgment and a permanent injunction in favor of an ice cream franchisor against a franchisee that continued operating its ice cream shop after termination....more

Lewitt Hackman

FRANCHISOR 101: Not at Liberty to Compete

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A federal district court in Michigan granted a preliminary injunction in favor of tax preparation franchisor, Liberty Tax Service (JTH Tax, Inc. v. Magnotte, E.D. Mich., ¶16,575), finding it was likely to succeed on its...more

Lewitt Hackman

FRANCHISEE 101: Cannabiz Accounting

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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

Lewitt Hackman

FRANCHISEE 101: Til Expiration Do Us Part

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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

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