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Before committing to a franchise business, consider...
A federal court in Virginia recently granted a motion brought by equipment suppliers DET Diesel Emission Technologies, LLC and Synergy Catalyst, LLC, together doing business as “Recore,” to enforce a forum selection clause...more
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
The Michigan Court of Appeals recently affirmed a trial court’s dismissal of certain claims by franchisees Red Fit, LLC and Cali Red, LLC against franchisor Red Effect International Franchise, LLC based on a release of...more
The Federal Circuit Court of Appeals reversed a preliminary injunction granted as to franchisor Urban Air’s patent and trade dress infringement claims against Kangaroo, LLC. UATP IP, LLC v. Kangaroo, LLC, 2024 WL 658205 (Fed....more
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
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
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
A federal court in Oklahoma granted franchisor Pizza Inn, Inc.’s motion for preliminary injunction preventing two former Pizza Inn franchisees – Odetallah and Allen’s Dynamic Food – from operating competing pizza restaurants...more
A federal court in Connecticut denied a franchisee’s motion for a temporary restraining order permitting it to operate until the court could hear a preliminary injunction motion. A.B. Corp. v. Dunkin' Donuts Franchising, LLC,...more
Terminating a franchise can pose several potential pitfalls and expose a franchisor to significant liability. A franchisor may not simply cancel, terminate, or refuse to renew a franchisee for just any reason....more
On March 1, 2022, the Delaware Court of Chancery delivered a memorandum opinion ordering a yoga franchisor to complete the acquisition of its franchisee’s chain of yoga studios. The case arose out of the parties’ pre-COVID...more
With the economic downturn caused by COVID-19, many expected a tidal wave of commercial bankruptcy filings. After an initial spike of retail bankruptcy cases at the outset of the pandemic, the onslaught of bankruptcy has not...more
An area developer entered into three agreements with a pizza franchisor and developed 50 franchises in Texas. The franchisor, Pizza Inn, Inc., tried to terminate all three contracts, though each had a twenty-year initial term...more
Welcome to The Franchise Memorandum by Lathrop GPM. Periodically, The Franchise Memorandum focuses on topics primarily of interest to companies that use distributors and dealers rather than manage a business format franchise...more
Illinois Federal Court Excludes Plaintiffs’ Expert Testimony on Certification Motion in Anti-Poaching Class Action - A federal court in Illinois granted Jimmy John’s motion to exclude expert testimony of a putative class...more
The Sixth Circuit Court of Appeals recently affirmed a $2.6 million award of liquidated damages in favor of a pizza franchisor and a summary judgment order enforcing termination of franchise agreements due to nonpayment and...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
Lola Salamah and Amro Elsayed signed a franchise agreement with M.M. Fowler, Inc., the franchisor of Family Fare gas stations, to operate a gas station franchise in North Carolina. A few years into the franchise...more
A federal district court in Michigan granted a preliminary injunction in favor of tax preparation franchisor, Liberty Tax Service (JTH Tax, Inc. v. Magnotte, E.D. Mich., ¶16,575), finding it was likely to succeed on its...more
A Wisconsin federal judge granted summary judgment in favor of a food service and cleaning equipment maker (“Stoelting”), ruling that minimum purchase requirements under two dealer agreements were not a franchise fee under...more
A bankruptcy court has found that Applebee’s failed to properly terminate its franchise agreements prior to the franchisee petitioning for bankruptcy. Therefore, the franchise agreements remained in effect and were property...more
A Florida federal court refused to dismiss a franchisor's claim for past due royalties and lost future profits. The case concerned an Interim Healthcare staffing franchise in Arizona. The franchisor issued a default notice...more
Three bills aimed at reforming Massachusetts’ controversial beer franchise law failed to make it out of committee this month, frustrating the efforts of brewers and beer distributors alike. Both sides will now go back to the...more
A Florida federal district court found that a doughnut franchisee's failure to pay royalties and other fees constituted a material breach of contract justifying termination, even though the franchisee expressed a willingness...more