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Franchises Breach of Contract Franchisors

Lathrop GPM

Missouri Federal Court Grants Franchisor’s Motion for Preliminary Injunction for Alleged Violation of Noncompete

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A federal court in Missouri recently granted a franchisor’s motion for a preliminary injunction, finding that the franchisee’s operation of a competing business demonstrated irreparable harm. Three Dog Bakery, LLC v. Crit,...more

Lathrop GPM

Arizona Federal Court Dismisses Franchisee’s Defamation Counterclaims Against Franchisor

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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

Lathrop GPM

California Federal Court Enforces Hotel Franchisor’s Arbitration Provision and Compels Arbitration

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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

Fox Rothschild LLP

Should the Litigation be in State or Federal Court?

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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

Lathrop GPM

California Federal Court Grants Franchisor’s Motion to Compel Arbitration but Finds Forum Selection and Choice of Law Clauses...

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A federal court in California recently granted franchisor Spiffy Franchising, LLC’s motion to compel arbitration of a franchisee’s claims, but found the North Carolina forum selection and choice of law provisions in the...more

Lathrop GPM

Minnesota Federal Court Grants Franchisor’s Motion for Preliminary Injunction for Noncompete and Lanham Act Violations by...

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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

Lathrop GPM

Florida Federal Court Finds Extension of Injunction Necessary to Protect Franchisor Rights

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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

Lathrop GPM

Tennessee Appellate Court Finds that Venue Clause in Franchise Agreement is Permissive and Not Mandatory

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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

Lathrop GPM

Franchisee’s Execution of Competing Franchise Agreement During Franchise Term Forecloses Claims Against Former Franchisor

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A federal court in New Jersey granted the franchisor of the Holiday Inn and Holiday Inn Express brands (Holiday Hospitality) summary judgment on former franchisee Scion Hotels’ complaint alleging violations of the New Jersey...more

Lathrop GPM

Michigan Precedent on Michigan Franchise Investment Law Held to Trump Inconsistent Sixth Circuit Precedent on Private Right of...

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A federal court in Michigan recently granted several related franchisors’ motions to dismiss a franchisee’s claims for violations of the Michigan Franchise Investment law. Benjamin Franklin Franchising SPE LLC v. David...more

Lathrop GPM

Illinois Federal Court Denies Cross Motions for Summary Judgment on Breach of Contract and Guaranty Claims Due to Ambiguity in the...

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A federal court in Illinois recently denied cross motions for partial summary judgment as to franchisor 360 Painting, LLC’s claims for breach of contract by painting franchisee R. Sterling Enterprises, Inc. (RSE), and breach...more

Fox Rothschild LLP

Georgia Court Finds Hooter’s Franchise Non-Compete Unreasonable in Geographic Scope

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A district court in Georgia recently granted a Motion for Preliminary Injunction filed by HOA Franchising, LLC’s, the franchisor of the Hooters restaurant chain (“Hooters”), against one of its former restaurant franchisees,...more

Lathrop GPM

California Court of Appeals Affirms Rejection of Reverse Royalty Damages in a Breach of Contract Action by Franchisee

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An appellate court in California has affirmed a trial court’s rejection of more than $4 million in lost business profits, which appellant Glen Suh alleged in a breach of contract action against franchisor Boba Time, Inc. Suh...more

Lathrop GPM

Illinois Federal Court Grants Franchisor’s Motion to Dismiss Terminated Franchisee’s Fraudulent Misrepresentation and Breach of...

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A federal court in Illinois recently dismissed a former franchisee’s counterclaims for alleged fraudulent misrepresentation, breach of contract regarding the franchisor’s advertising fund, and breach of contract and implied...more

Lathrop GPM

Virginia Federal Court Denies Franchisor’s Motion for Preliminary Injunction

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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

Lathrop GPM

Pennsylvania Federal Court Rules It Has Subject Matter Jurisdiction to Decide Trade Secret Claim but Dismisses as Untimely...

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A federal court in Pennsylvania granted in part and denied in part a former franchisee’s motion to dismiss a franchisor’s allegation that she misappropriated trade secrets and breached the franchise agreement. JTH Tax, LLC v....more

Lathrop GPM

Tenth Circuit Holds that Good Faith and Fair Dealing Claim Requires Expectation Created by Express Contract Terms

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The Tenth Circuit has ruled in favor of KFC in a dispute with a franchisee alleging a breach of the implied covenant of good faith and fair dealing. Kazi v. KFC US, LLC, 2023 WL 4983119 (10th Cir. Aug. 4, 2023)....more

Lathrop GPM

North Carolina Federal Court Rules That Franchise Agreement’s 1-Year Statute of Limitations Clause Barred Action Against...

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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

Lewitt Hackman

Franchisor 101: A Broad Brush Addendum

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A Virginia district court dismissed a lawsuit filed by 360 Painting, a franchisor of residential and commercial painting services, concluding an addendum to the parties’ franchise agreement precluded 360 Painting’s claims for...more

Foley & Lardner LLP

Court Looks at What a Franchise Is Under the Minnesota Franchise Act

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In Louis Degidio, Inc. v. Industrial Combustion, LLC, Louis Degidio, Inc. (Degidio) and Louis Degidio Services, Inc. (Degidio Services) sued Industrial Combustion, LLC (IC), a manufacturer of “institutional boiler system”...more

Lathrop GPM

Michigan Federal Court Grants Motion to Dismiss for Lack of Personal Jurisdiction and Forum Non Conveniens

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A federal court in Michigan granted a motion to dismiss claims that franchisor Bateel International, LLC had violated the Michigan Franchise Investment Law and the Texas Business Opportunity Act. Luxury Concepts, Inc. v....more

Lathrop GPM

Minnesota Bankruptcy Court Enjoins Franchisee’s Breach of Post-Termination Noncompete

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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

Lathrop GPM

New York Appellate Court Dismisses Royalties Claim Because of Franchisor’s Breach Under Preliminary Injunction

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A state appellate court in New York recently held a franchisor was not entitled to unpaid royalty fees because of its own breach of a franchise agreement reinstated by preliminary injunction. Integrity Real Estate Consultants...more

Lathrop GPM

New Jersey Federal Court Finds Franchisee’s Defense of Fraudulent Inducement Sufficient to Block Franchisor’s Motion for Summary...

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A federal court in New Jersey has denied a franchisor’s motion for summary judgment on its claim for breach of contract by its franchisee, finding that the franchisee raised issues of material fact regarding whether it had...more

Lathrop GPM

Minnesota Federal Court Holds Assignment of Franchise Does Not Constitute a Sale Under the Minnesota Franchise Act

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A federal court in Minnesota has dismissed a claim under the Minnesota Franchise Act (MFA), holding that a franchisor’s consent to the assignment of a franchise does not constitute a sale or an offer to sell under the Act....more

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