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...
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
Constructing a hotel is a complex endeavor that requires meticulous planning and execution to meet the expectations of both the developer and the flag. One of the critical aspects of this process is ensuring that the...more
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
The Texas Supreme Court reversed a lower court’s decision against a franchisor based on a theory of negligence after a customer was assaulted by an employee of the franchisee. The court concluded that franchisor did not owe a...more
On May 2, 2025, the Texas Supreme Court held that a franchisor owes no duty of care for injuries caused by a franchisee’s employee unless the franchisor retained or exercised control over the hiring of that employee....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
The Supreme Court of Texas recently ruled that franchisor Massage Heights did not owe a duty of care to a massage customer who alleged a sexual assault, because, among other reasons, Massage Heights had neither the...more
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 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
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
A New York federal court denied a franchisor’s motion to dismiss a franchisee’s complaint for misrepresentations and improper financial performance representations which allegedly induced the franchisee to enter into multiple...more
The Eighth Circuit recently applied a novel, broad reading of the Missouri Franchise Act granting franchise protection to distributors which previously would not likely have been considered franchisees....more
An Ohio federal court granted a franchisor’s motion to dismiss a putative class of franchisees alleging antitrust violations and related claims, including interference to deflate franchisees’ reimbursement rates. Other class...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 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 positive development for franchise systems seeking to streamline the SBA loan approval process for their franchisees is coming this summer. The new version of the SBA Loan Origination Policies and Procedures for Lender and...more
A federal district court in Tennessee granted a motion for a default judgment in the franchisor’s favor against its former franchisee requiring the franchisee to pay damages and comply with the post-termination obligations...more
An employee of a Domino’s Pizza franchisee, returning from a pizza delivery, collided with a motorcyclist who suffered serious injuries. After a Pennsylvania jury found Domino’s (as franchisor) vicariously liable for the...more
A recent federal court decision in T&T Management, Inc. v. Choice Hotels, Inc. underscores key contractual and operational considerations for franchisors. T&T filed suit in U.S. District Court for the District of Minnesota...more
On February 27, 2025, the District of Minnesota granted a franchisor’s motion to dismiss a lawsuit initiated by its franchisee, alleging, among other things, breach of contract and misappropriation of trade secrets under the...more
A federal court in North Dakota recently denied a motion to dismiss vicarious liability claims against the corporate entities constituting the Subway franchise system. C.S. v. Subway Worldwide, Inc., 2025 WL 472475 (D.N.D....more
The Superior Court of Pennsylvania recently affirmed a judgment holding Domino’s Pizza vicariously liable for a motorcycle accident involving a franchisee’s delivery driver. Coryell v. Morris, — A.3d —, 2025 Pa. Super. 28...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 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
A New Jersey Court of Appeals found that a retailer was not a franchisee under New Jersey’s Franchise Practices Act (NJFPA) and therefore NJFPA’s termination requirements did not apply to the retailer’s termination....more