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Restrictive Covenants Franchise Agreements

Offit Kurman

Understanding the FDD and Franchise Agreement Before You Invest

Offit Kurman on

Franchise Agreements are typically drafted by the franchisor and presented on a “take it or leave it” basis. These contracts often impose strict controls over how you operate your business — from approved vendors and...more

Foley & Lardner LLP

Federal Court Enjoins Former Franchisees and Two Related Entities from Competing Against Franchisor

Foley & Lardner LLP on

A federal court recently granted in part and denied in part a franchisor’s motion to enjoin the post-termination activities of its former franchisees and two related entities. Rooterman, LLC is a plumbing services franchisor....more

Lathrop GPM

Arizona Federal Court Dismisses Franchisee’s Defamation Counterclaims Against Franchisor

Lathrop GPM on

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

Massachusetts Federal Court Grants Preliminary Injunction for Noncompete Violations, Denies Injunction for Trademark Infringement

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A federal court in Massachusetts recently granted, in part, a Motion for Preliminary Injunction as to enforcement of franchise agreement noncompete covenants but denied the motion as to claims of trademark infringement,...more

Lewitt Hackman

Franchisee 101: When the Competition Leaks

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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

Polsinelli

2024 Recap of Franchise Developments and 2025 Trends to Watch

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There were a number of important and potentially impactful developments in 2024 that we predict will continuing developing and trending in 2025. Some of these topics are also discussed in other articles in this annual update....more

Foley & Lardner LLP

Navigating Non-Compete Agreements: Key Considerations for In-House Counsel in Franchise Businesses

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In May of last year, the Federal Trade Commission (FTC) sought to ban non-compete agreements in most employment contracts. Franchise agreements were an exception. However, before the rule could take effect in September, a...more

Polsinelli

NASAA Supports Reasonable Post-Term Non-Competes in Franchise Agreements

Polsinelli on

Last year saw non-compete agreements come under repeated scrutiny from the Federal Trade Commission. On April 23, 2024, the FTC issued a final rule banning non-compete agreements in most employment contracts....more

Troutman Pepper Locke

FTC and DOJ Issue Antitrust Guidelines for Business Activities Affecting Workers

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On January 16, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) issued “Antitrust Guidelines for Business Activities Affecting Workers” (2025 Guidelines). The 2025 Guidelines aim to “promote clarity and...more

Offit Kurman

Virginia Bill That Would Ban Franchise Non-Competes Advances in State Senate

Offit Kurman on

Virginia Senate Bill 798, introduced by former in-home senior care franchisee Sen. Chris Head, was passed unanimously by the Virginia Senate on January 17, 2025. The bill would amend Virginia's Retail Franchising Law to...more

BakerHostetler

Department of Justice and Federal Trade Commission Release Guidelines on Business Practices That Impact Workers

BakerHostetler on

On January 16, 2025, in the waning hours of the Biden-Harris administration, the Department of Justice (DOJ) and Federal Trade Commission (FTC) jointly released their “Antitrust Guidelines for Business Activities Affecting...more

Lathrop GPM

Michigan Federal Court Grants Franchisor’s Motion for Preliminary Injunction Against Former Restoration Service Franchisee

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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

Polsinelli

Impact of the Texas Federal Judge Partially Blocking FTC Ban on Non-Competes for Franchisors and Franchisees

Polsinelli on

As reported on July 3 by the Polsinelli Labor & Employment practice group alert, by order dated July 3, 2024 the Northern District of Texas granted a preliminary injunction preventing the Federal Trade Commission (FTC) from...more

Lathrop GPM

New Jersey Federal Court Partially Enforces Noncompete Covenant Against Former Franchisee

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A federal court in New Jersey recently granted a franchisor’s motion for a preliminary injunction, enjoining the former franchisee from using the franchisor’s marks and violating the franchise agreement’s noncompete clause,...more

Akerman LLP

New FTC Rule Spares Non-Compete Clauses That Bind Franchisees, But Bans Most “Worker” Non-Compete Clauses

Akerman LLP on

On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a Non-Compete Clause Rule that would ban most non-compete clauses in agreements between businesses and their “workers.” The final rule will take effect 120...more

UB Greensfelder LLP

FTC Issues Rule Prohibiting Non-Competes

UB Greensfelder LLP on

On April 23, 2034, the Federal Trade Commission (FTC) issued a final rule intended to ban the use and enforcement of most non-compete clauses signed by workers. The new rule is not in effect yet. It will become...more

Foley & Lardner LLP

LeTip World Franchise LLC v. Long Island Social Media Group LLC

Foley & Lardner LLP on

In LeTip World Franchise LLC v. Long Island Social Media Group LLC, the U.S. District of Court for the District of Arizona granted a temporary restraining order in favor of a franchisor, LeTip World Franchise LLC (“LeTip”)...more

Lewitt Hackman

Franchisor 101: Getting Away With Tax (Franchisor) Evasion

Lewitt Hackman on

A Pennsylvania federal court refused to enforce non-competition and non-solicitation covenants in a franchise agreement of a nationwide tax preparation service franchisor. The court dismissed the franchisor’s request for...more

Troutman Pepper Locke

Seventh Circuit Revives McDonald's Employee No-Poach Litigation

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In June of 2022, McDonald’s obtained a judgment on the pleadings, ending antitrust litigation challenging the legality of the no-hire restraints it previously included in its franchise agreements. More than a year later, the...more

Lathrop GPM

Minnesota Prohibits Certain Restrictive Covenants in Franchise Agreements

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Reflecting a shifting national landscape on restrictive covenants, the Minnesota Legislature recently adopted legislation that prohibits franchisors from placing certain nonsolicitation and no-poach restrictions in franchise...more

Lewitt Hackman

Franchisee 101: Court Taxes Franchisor’s Restrictive Covenants

Lewitt Hackman on

The Second Circuit Court of Appeals affirmed a district court’s order denying a franchisor’s request for preliminary injunction against a terminated franchisee to enforce covenants not to compete or solicit former clients....more

Lewitt Hackman

Franchisor 101: Court Hits Brakes on Former Franchisees

Lewitt Hackman on

An Ohio appellate court upheld the state trial court’s decision to grant a permanent injunction against two former franchisees of an auto body shop franchise working for a competitor in violation of the franchise agreement’s...more

ArentFox Schiff

FTC Contemplates Banning Non-Compete Covenants in Franchise Agreements

ArentFox Schiff on

On January 5, 2023, the Federal Trade Commission (FTC) published a proposed rule that, with limited exceptions, would both ban post-termination non-compete covenants in employment agreements and require rescission of existing...more

Kilpatrick

Class Action | Eleventh Circuit Reinstates No Hire Antitrust Claims Against Burger King

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Partner Jay Bogan recently discussed the Eleventh Circuit Reinstating No Hire Antitrust Claims Against Burger King....more

BakerHostetler

Decision Benefits Franchise Businesses and Finds Alston Bars Challenge to No-Poach Agreements

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In June 2021, the Supreme Court reaffirmed in NCAA v. Alston that antitrust claims under Section 1 of the Sherman Act “presumptively” call for rule-of-reason analysis and that only the rare case merits “quick look” or per se...more

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