3 Key Takeaways | Is Franchising Doomed? The 2024 Version
Is Franchising Doomed?
II-27 - Our 1st Anniversary Special: Bringing Back Our Inaugural Guest to Discuss What Was and What Will Still Be With President Trump
Employment Law This Week: Break Pay, Misclassification of Franchisees, California Computer Professional Exemption, Non-Compete Payment
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 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
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
The California Court of Appeals upheld a lower court’s decision finding that a Texas court had personal jurisdiction over a California franchisee. GlobalCFO, LLC and GlobalCFO Franchise, LLC (collectively, “GlobalCFO”),...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
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
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
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
The Ninth Circuit Court of Appeals recently affirmed a decision that a group of franchisees are not employees of their franchisor, even though the trial court failed to apply the correct test. Haitayan v. 7-Eleven, Inc., 2022...more
The Eleventh Circuit Court of Appeals recently issued an opinion concerning a dispute over a franchisor’s effort to mandate changes to a franchisee’s operations. The Court granted the franchisor a mixed result. The decision...more
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
Ninth Circuit Reverses Class Action Settlement Approval and Fee Award - The Ninth Circuit Court of Appeals has reversed the approval of a $10 million voucher settlement and a $2.6 million attorneys’ fee award in a class...more
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
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
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
Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Fifth Circuit Reverses Trial Court’s Excusal of Area Representative’s Tardy Renewal Notice -...more
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
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
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
The United States District Court for the District of Connecticut recently dealt another blow to serial TCPA plaintiff, Gorss Motels, Inc., granting summary judgment to the defendant in Gorss Motels, Inc. v. Lands’ End, Inc.,...more
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
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
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
In a major victory for franchisors, a panel of the Ninth Circuit recently held that McDonald's Corporation cannot be liable as a joint employer for the wage and hour violations of its franchisees. Importantly, the court held...more
In a case that should grab the attention of franchisors across the country, a panel of the US Court of Appeals for the Ninth Circuit has ruled that McDonald’s Corporation is not the joint employer of the employees of a...more