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...
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
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 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
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
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 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
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 appellate court affirmed a state trial court’s ruling that a terminated retailer of custom outdoor kitchens was not in a franchise relationship with a manufacturer of outdoor grills and that the New Jersey...more
While 2024 saw more stability in the financial markets than 2023, many challenges arose in 2024 for franchised businesses, manufacturers and retail chains, including bankruptcies of many large restaurant and retail chains,...more
Last May, the Federal Trade Commission looked to ban non-compete agreements in most employment contracts aside from franchise agreements. Although scheduled to become effective in September, a federal court vacated the ruling...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
In a franchisor’s suit against its franchisee and that franchisee’s new business, a federal court in Kansas recently denied the new business’ motion to dismiss for lack of personal jurisdiction. HappyFeet-Legends Int’l, Inc....more
If you ask for a definition of "franchise" in California law, there are at least three answers. Two are statutory and one is judicial. Corporations Code Section 31005 defines "franchise" for purposes of California's...more
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
A federal court in Florida recently held that extending a consent injunction was necessary to protect the interests of a franchisor. Tri-Cnty. Mobile Wash, Inc. v. B&C Wash Corp., 2024 WL 4379673 (S.D. Fla. Oct. 3, 2024)....more
The Tennessee Court of Appeals reversed a district court’s dismissal of a franchisee’s declaratory judgment claim, finding that the claim was properly brought in Tennessee. Lakeway Real Estate2, LLC v. ERA Franchise Sys.,...more
The Australian government has released an Exposure Draft of the Competition and Consumer (Industry Code – Franchising) Regulations 2024 (Cth) (the Exposure Draft), which would repeal and replace the current Franchising Code...more
The California Court of Appeals upheld a decision finding that a Texas court had personal jurisdiction over California franchisees. GlobalCFO LLC v. Venkataramanappa, 2024 WL 4220439 (Cal. Ct. App. Sept. 18, 2024)....more
A federal court in Michigan recently granted a motion to dismiss for lack of personal jurisdiction against one owner of a franchisor, while denying the motion to dismiss against the other owner and granting the franchisor’s...more
The Massachusetts Supreme Judicial Court answered “no” to a certified question from the First Circuit Court of Appeals asking whether plaintiff franchisees “‘perform any service’ for 7-Eleven within the meaning of [the...more
On September 5, 2024, the Massachusetts Supreme Judicial Court (“SJC”) answered a second certified question in Patel, et al. v. 7-Eleven, Inc., et al. (“Patel II”), a long-running case where 7-Eleven franchisees claimed they...more
Tasty Baking Company (“Tasty”), a manufacturer of prepackaged goods, terminated Distefano, Inc. (“Distefano”), Maryland-based owner of a franchise with rights to sell Tasty products in a prescribed area called a “route.”...more
A federal court in Michigan has granted a franchisor’s motion for preliminary injunction against former franchisees for violating the franchise agreements’ post-termination noncompete provisions. 1-800 Water Damage Int’l LLC...more