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Franchisor 101: Franchisor Cannot Massage its Way Out of Vicarious Liability

A Texas court of appeals affirmed judgment in favor of a plaintiff who claimed a franchisor was vicariously liable for a franchisee’s employee’s wrongful conduct....more

Franchisor 101: A Tasty Appeal

The Eleventh Circuit Court of Appeals reversed a district court’s summary judgement order, granting a chocolate shop franchisor’s breach of contract and unfair competition claims. The appellate court concluded there were...more

Franchisee 101: Great Lakes Forum Selection Dispute

A federal appellate court declined to enforce a choice-of-forum clause finding enforcement would conflict with Michigan’s Franchise Investment Law (“MFIL”). Lakeside Surfaces, Inc., a maker of stone countertops, sued...more

Franchisor 101: Court Delivers for Pizza Franchisor

A Texas appeals court affirmed a lower court judgment in favor of Pizza Hut and its franchisee for claims of an alleged sexual assault by a delivery driver. The appellate court held Pizza Hut was not liable for the...more

Franchisee 101: Jani-King Franchisees Wear Many Crowns

Past and present franchisees of commercial cleaning service franchisor, Jani-King, brought claims for violation of Connecticut minimum wage and anti-kickback laws, and unjust enrichment. They claimed Jani-King misclassified...more

Franchisee 101: Match-Taker

A San Francisco franchisee of the It’s Just Lunch matchmaking system received an offer to buy the franchised business for about $146,000 with the final price to be determined. Under the offer, the actual purchase price would...more

Franchisee 101: No Excuse for Late Notice

The U.S. Court of Appeals for the Fifth Circuit reversed a trial court judgment against a Texas franchisor, finding the lower court erred in excusing an untimely renewal notice of area development agreements. The Court held a...more

Franchisor 101: (Non)Competing for Care

A U.S. Court of Appeals upheld a federal district court decision partly granting a preliminary injunction sought by a companionship and domestic care services franchisor against a former franchisee, for violating the...more

Franchisor 101: New Joint Employer Rule Nixed for Now

In another twist to the joint employer saga, a United States District Court in New York voided the Department of Labor’s (“DOL”) new rule for joint employment. Eighteen (18) states and the District of Columbia brought a...more

FRANCHISEE 101: Bar-B-Q Blues — A Tale of Friendship, Partnership, and Deceit

A federal appeals court reversed dismissal of a claim against a barbeque restaurant franchisor. The court found that, despite having signed releases in favor of the franchisor, a former franchisee had valid claims for...more

Franchisor 101: Romaine Rejection

Many will recall the 2018 national outbreak of E. coli bacteria linked to romaine lettuce. In April that year, an Ohio franchisor ordered its restaurants to stop serving romaine lettuce and dispose of any remaining romaine...more

Franchisor 101: The Wrong Tools to Avoid California Courts

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

Franchisee 101: Indemnification Woes

A federal appellate court held that a franchisee must indemnify a franchisor for its litigation defense costs, vacating a district court’s order of summary judgment for the franchisee....more

Franchisor 101: Forum Selection Clause Gone Wrong

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

Franchisor 101: Dickey’s Arbitration Pit

A federal appeals court upheld a lower court’s refusal to order arbitration against a franchisee who bought an existing franchise. This was despite a provision in the franchise agreement to arbitrate “most disputes.”...more

Franchisor 101: The Proof Is in the Writing

Ten years after the franchisor of the EXIT real estate system entered into a franchise agreement for a franchisee to operate an EXIT franchise in Maitland, Florida, the parties entered into another franchise agreement for a...more

Franchisor 101: Enjoined in Margaritaville

Eskimo Hut, a franchisor of convenience stores that sell frozen daiquiris-to-go, convinced a Texas appellate court that it would probably win on claims that South Plains, a franchisee using a nonconforming drink mix, breached...more

Franchisor 101: Franchisor Can Be Liable as “Employer” for Missclassifying Workers

The Ninth Circuit sent shockwaves through the franchise industry in ruling that last year’s California Supreme Court decision broadening who may bring wage misclassification claims (Dynamex v. Superior Court) applied...more

Franchisor 101: Termination Is Not Enforcement

A federal district court upheld an arbitration panel’s decision to deny attorneys’ fees to Benihana, even though Benihana won a dispute with its licensee. The licensee started arbitration claiming Benihana breached the...more

Franchisor 101: Franchisor Fails to Escape State’s Changed Tax Interpretation

A state appellate court (“Court”) in New Mexico upheld a decision by the state’s Taxation and Revenue Department (“Department”) that royalties paid to out-of-state franchisors are subject to the state’s gross receipts tax...more

Franchisee 101: No Gain from Gratuitous Promises

A federal Appeals Court has held that an offer to extend a franchisee’s buyback period lacked consideration required to form an enforceable contract and, instead, was an unenforceable gratuitous promise by the franchisor....more

FRANCHISOR 101: Run for the Border(line) Wage Claim

The Ninth Circuit Court of Appeals upheld summary judgment in favor of Taco Bell on class claims that employees should be paid under California law for time spent on company premises eating employer-discounted meals during...more

FRANCHISOR 101: Supreme Tax Implications

On June 21 the U.S. Supreme Court reversed prior case law and let states tax online retailers that do not have physical presence in the state. The ruling also has significant implications for franchise systems that sell...more

FRANCHISOR 101: Injunction Bottleneck

A restaurant franchisor, World of Beer Franchising ("WOB"), recently lost an appeal to enforce a post-termination restriction against a franchisee launching a competing business. Both the trial and appellate court ruled...more

FRANCHISEE 101: McDonald's Shaking Damages for OT Policy

In Los Angeles Superior Court, McDonald's claimed victory when 6,600 workers seeking $41 million in back pay and penalties came away with less than 2% of the amount sought in a claim that the fast-food giant cheated them out...more

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