3 Key Takeaways | Is Franchising Doomed? The 2024 Version
Is Franchising Doomed?
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A recent federal court decision in T&T Management, Inc. v. Choice Hotels, Inc. underscores key contractual and operational considerations for franchisors. T&T filed suit in U.S. District Court for the District of Minnesota...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
A federal court in New York recently granted a motion to dismiss for lack of personal jurisdiction in an action asserting claims that franchisor Hyatt Corporation acted with negligence in connection with assaults to guests...more
A federal court in Maine granted a franchisor’s motion to dismiss claims asserting that a franchisor was liable for its franchisee’s alleged age discrimination in employment. Goodwill v. Anywhere Real Est., 2023 WL 4034372...more
A Michigan federal district court denied a franchisor’s motion to dismiss claims under Title VII of the Civil Rights Act of 1964 and Michigan law, and claims alleging retaliatory termination and sexually hostile work...more
A federal court in Michigan recently denied a franchisor’s motion to dismiss claims alleging that it was liable as a joint employer for claims under Title VII of the Elliott-Larsen Civil Rights Act, Michigan’s state...more
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
A federal district court denied a pizza franchisor’s motion to dismiss a former franchisee’s complaint, finding the former franchisee sufficiently pleaded the franchisor coerced the franchisee into signing a general release....more
A federal court in Tennessee recently granted a franchisor’s motion to dismiss claims alleging that a franchisor was liable for a workplace mass shooting by a franchisee. Fernald v. JFE Franchising, Inc., 2023 WL 2938312...more
A federal bankruptcy court in Delaware has dismissed time-barred claims that a Chapter 7 Trustee alleged on behalf of a bankrupt franchisor, AVF Franchising, LLC, against several of its franchisees. In re Start Man Furniture,...more
A federal court in Maryland granted a foreign hotel franchisee’s motion to dismiss for lack of personal jurisdiction but denied a forum non conveniens motion in a personal injury case naming both franchisor and franchisee as...more
A federal court in Florida dismissed an action by franchisees against their franchisor for lack of subject-matter jurisdiction. The franchisees asserted claims under California and Florida laws alleging the franchisor, OR...more
A federal court in Virginia denied tax franchisor, Liberty Tax’s, motion to dismiss complaints by two of its area developers (“ADs”). The ADs claimed Liberty Tax breached their contract for wrongfully terminating, failing to...more
A franchisee sued real estate franchisor Century 21 for a declaration whether the franchisee could end its franchise agreement early despite a provision that deleted the franchisee’s early termination right. Noting the...more
A federal court in Alabama denied an urgent care franchisee’s motion to dismiss a suit brought by its franchisor. The franchisee argued the franchise agreement required suits to be brought within a one-year period. But the...more
A federal court has granted, in part, restaurant franchisor Golden Corral’s motion to dismiss a complaint brought by a former franchisee. The court found a general release of claims, executed as part of an assignment of a...more
Twin City Lodging LLC bought a Best Western Hotel in Mankato, Minnesota, then entered into a “Membership Agreement” with Best Western International. Best Western granted Twin City a license to operate the hotel under Best...more
A gasoline franchisee defeated a motion to dismiss brought by its franchisor, seeking to avoid a claim under the federal Petroleum Marketing Practices Act (PMPA). In 2018, Global Companies (Global) sent the franchisee a...more
Legal battles over the antitrust treatment of no-poach agreements continue to escalate with new district court decisions and new pronouncements from two “titans” of antitrust policy, the Department of Justice (DOJ) and the...more
Hot dog franchisor, Charlie Graingers, was unable to obtain dismissal of a federal lawsuit brought by franchisees alleging fraud, misrepresentation and breach of fiduciary duty....more
Jimmy John’s will face antitrust claims, after an Illinois federal judge declined to dismiss allegations in a class action. Plaintiffs claim the chain’s franchise agreement harmed competition by preventing franchisee...more
Beer distributors can be on common footing with their franchisee counterparts in bargaining with brewers or suppliers. Depending on the jurisdiction, distributors may have protection through beer distribution statutes...more
Many franchise agreements include a contractual limitation period or time limit when parties can bring a claim for relief. Though the franchise agreement is often written by and for the franchisor, these limitations can help...more