3 Key Takeaways | Is Franchising Doomed? The 2024 Version
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Is Franchising Doomed?
Strategies for Negotiating with a Franchisee and Franchisor
Before committing to a franchise business, consider...
Notwithstanding recent political turmoil, Korean companies have been expanding into the United States at a fast clip, continuing a trend of investment beneficial to businesses in both countries. As Korean brands increasingly...more
Dispute resolution provisions in franchise agreements often address how, when, and where parties will mediate. However, the enforceability of these provisions can change depending on the law of the state governing the...more
In OTG New York, Inc. v. Ottogi America, Inc., OTG was the exclusive regional distributor for food company Ottogi from 2008–23, during which Ottogi shipped inventory to OTG’s New Jersey warehouse. In 2024, Ottogi terminated...more
A federal court in California recently denied a franchisor’s motion to dismiss litigation, holding that a franchise agreement provision requiring the parties to mediate in Texas prior to instituting litigation or arbitration...more
A key term of any franchise agreement is the venue selection clause as this page has previously explained. This issue was at the forefront of Convenience Stores Leasing & Management, LLC’s (“CSLM”) August 2024 suit...more
A federal court in Wisconsin recently transferred a franchisor’s breach of contract lawsuit to Indiana, the location of the franchisee, even though the parties’ supply agreement contained a Wisconsin forum selection clause....more
A federal court in California recently granted Ringside Development Company’s motion to stay a franchisee-initiated lawsuit pending resolution through alternative dispute resolution. Jameson v. Ringside Development Company,...more
A district court in Arizona granted a franchisor’s motion to transfer venue to Missouri pursuant to the terms of the franchise agreement. S&G Elite LLC (“S&G”) and ST National Franchising, LLC (“Franchisor”) entered into a...more
A California federal court partially granted a motion to compel arbitration by car care franchisor Spiffy Franchising. However, the court invalidated provisions in the franchise agreement providing for dispute resolution in...more
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
A federal district court in Texas denied an individual defendant’s motion to dismiss for lack of personal jurisdiction, finding the defendant—the owner of the company that was granted a franchise—was bound in his individual...more
Franchise agreements’ arbitration clauses are enforceable even when subsequent agreements between the same parties contain forum selection clauses requiring litigation in different forums. Additionally, a trial court’s...more
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
In Alamo Intermediate II Holdings, LLC. v. Birmingham Alamo Movies, the U.S. District Court for the Western District of Texas, denied franchise owner Hunter Renfroe’s motion to dismiss for lack of personal jurisdiction. The...more
A federal court in Texas has denied an individual owner’s motion to dismiss for lack of personal jurisdiction despite the fact that he had not signed the relevant franchise agreement or corporate guaranty in his individual...more
A federal district court in Indiana held that a forum selection clause in the franchise agreement prevailed over a competing forum selection clause in the personal guaranty....more
A federal court in Florida recently dismissed a franchisee’s lawsuit sua sponte pursuant to the forum-selection clause in the parties’ franchise agreements, finding the clause valid, mandatory, and enforceable. Kava Culture...more
A federal court in California denied a subfranchisor’s motion to transfer venue, holding that its Operator Agreement constituted a franchise agreement, thus making its forum-selection clause void under the California...more
A federal court in Nevada recently transferred a franchisor’s trademark infringement lawsuit to Illinois, the location of the franchise, declining to rule on the franchisor’s motion for preliminary injunction. Hofbräuhaus of...more
A federal district court in California granted a franchisor’s motion to transfer venue of claims brought by non-California franchisees to Texas. The ruling was based on a forum selection clause in the franchise agreements....more
The Sixth Circuit has held that a contractual forum-selection clause in a franchise agreement was unenforceable because it violated state law. In Lakeside Surfaces, Inc. v. Cambria Company, LLC, Lakeside Surfaces, a...more
A federal appellate court declined to enforce a choice-of-forum clause finding enforcement would conflict with Michigan’s Franchise Investment Law (“MFIL”). Lakeside Surfaces, Inc., a maker of stone countertops, sued...more
A hotel franchisee brought a class action lawsuit in Louisiana federal court on behalf of Louisiana franchisees. The franchisor moved to transfer the action to Georgia, based on the mandatory forum selection clause in the...more
Ninth Circuit Reverses Class Action Settlement Approval and Fee Award - The Ninth Circuit Court of Appeals has reversed the approval of a $10 million voucher settlement and a $2.6 million attorneys’ fee award in a class...more
Two Illinois Federal Courts Deny Class Certification in Anti-Poaching Class Actions Against Franchisors - Two federal courts in Illinois have rejected motions to certify classes of employees who worked in franchised...more