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Is Franchising Doomed?
Strategies for Negotiating with a Franchisee and Franchisor
Before committing to a franchise business, consider...
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
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 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 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 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
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
Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Post-Termination Injunction: Noncompete Covenants - California Federal Court Enforces...more
A federal court in Connecticut ruled against an urgent care franchisor’s motion to dismiss, finding the plaintiff had standing to sue under Article III of the U.S. Constitution. The court still dismissed the plaintiff’s...more
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
The Ninth Circuit ruled that a California Matco Tool franchisee, John Fleming, could bring a class action wage and hour suit in California, even though a forum selection clause in the distribution agreement specified Ohio...more
A California Court of Appeal held that courts should not enforce forum selection clauses in contracts that also contain a jury waiver. For franchisors that have California franchisees, this ruling could complicate the ability...more
A federal judge in the Western District of Arkansas recently rejected a franchisor's attempt to invoke a forum selection clause, in Rob & Bud's Pizza, LLC v. Papa Murphy's Int'l, Inc,, on public policy grounds rooted in a...more
A federal court in Sacramento recently upheld a franchisor's forum selection clause and transferred an action brought by an area representative to the federal district court in the Western District of Texas....more
A recent decision in Allegra Holdings, LLC v. Davis demonstrates that courts are enforcing forum selection clauses in favor of out-of-state franchisors and against in-state franchisees, notwithstanding franchise anti-waiver...more