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A federal court in New Jersey recently entered default judgment against franchisee Nisha Investments, LLC and its guarantor Rajesh Patel arising from their early termination of a franchise agreement with La Quinta...more
A Massachusetts federal court granted a franchisor’s request to enforce the franchise agreement’s post-termination non-compete provision against a terminated franchisee....more
A federal court in New Jersey recently granted summary judgment against the guarantor of a hotel franchise agreement, requiring him to pay contractual post-termination damages. Ramada Worldwide Inc. v. Keys Hosp., LLC, 2024...more
A Minnesota district court issued a preliminary injunction against a former franchisee who engaged in a competing business during the franchise relationship. Snap Fitness, Inc., a gym franchisor, entered into a franchise...more
A Kansas district court denied a franchisor’s motion for preliminary injunction against its former franchisee who engaged in competing businesses immediately after terminating the franchise relationship....more
A federal district court in New Jersey recently found that restaurant franchisor Golden Corral was entitled to nearly $1.2 million in consequential damages after terminating a franchised Golden Corral restaurant....more
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
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
A Michigan district court held a franchisee breached its obligations under its franchise agreements and upheld the liquidated damages clause in the agreements....more
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
A federal court in Michigan granted Little Caesar Pizza Enterprises, Inc.’s motion for summary judgment seeking to enforce its termination of the franchise agreements between it and franchisee S&S Pizza Enterprises, Inc....more
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
A federal district court denied a pizza franchisor’s motion to dismiss a former franchisee’s complaint, finding the former franchisee sufficiently pleaded the franchisor coerced the franchisee into signing a general release....more
A federal district court in New Jersey denied Travelodge Hotels’ motion for partial summary judgment against a former franchisee, holding there are genuine issues of fact as to Travelodge’s breach of contract claims....more
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
Terminating a franchise can pose several potential pitfalls and expose a franchisor to significant liability. A franchisor may not simply cancel, terminate, or refuse to renew a franchisee for just any reason....more
A federal district court in Nevada partly denied a franchisor’s summary judgment motion on claims brought by a franchisee. IJL Midwest entered into several franchise agreements with a franchisor of a dating and...more
A federal court in Virginia denied tax franchisor, Liberty Tax’s, motion to dismiss complaints by two of its area developers (“ADs”). The ADs claimed Liberty Tax breached their contract for wrongfully terminating, failing to...more
An area developer entered into three agreements with a pizza franchisor and developed 50 franchises in Texas. The franchisor, Pizza Inn, Inc., tried to terminate all three contracts, though each had a twenty-year initial term...more
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
Welcome to The Franchise Memorandum by Lathrop GPM. Periodically, The Franchise Memorandum focuses on topics primarily of interest to companies that use distributors and dealers rather than manage a business format franchise...more
On competing motions for a temporary restraining order (“TRO”) by ReBath – a nationwide bathroom remodeling franchisor, and its terminated franchisee, ReBath prevailed in restraining the ex-franchisee’s further operations. A...more
A federal court in Michigan granted 7-Eleven’s motion for summary judgment, enforcing the franchisor’s right to terminate a franchisee with repeated defaults, even though each default had been cured. 7-Eleven’s franchise...more
A federal court in Nashville granted summary judgment on breach of contract claims in favor of a damage restoration franchisor’s lawsuit with a former California franchisee. A Servpro franchisee had a territory in Los...more
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