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Before committing to a franchise business, consider...
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
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
A federal court in California granted two motions to dismiss for failure to state a claim in an action asserting discrimination and tortious interference claims against Volvo Car USA and its franchisee Haron Motor Sales, Inc....more
A federal court in California recently granted a motion brought by a franchisor and two of its employees to compel arbitration and dismiss an action alleging violations of the California Franchise Investment Law, breach of...more
A Virginia federal court recently granted a motion to dismiss all six counts of a franchisor's complaint against a competing former franchisee for failure to plead with specificity under the Defend Trade Secrets Act of 2016...more
A federal court in Illinois recently dismissed a former franchisee’s counterclaims for alleged fraudulent misrepresentation, breach of contract regarding the franchisor’s advertising fund, and breach of contract and implied...more
A federal court in Georgia recently dismissed the claims of an alleged human trafficking victim against hotel franchisor G6 Hospitality, while allowing some claims to proceed against the hotel franchisee. Doe (K.B.) v. G6...more
An appellate court in Illinois upheld a trial court’s dismissal of claims that franchisor was vicariously liable for the alleged actions of its franchisees. Shavers v. The UPS Store, Inc., 2023 IL App (1st) 221407-U (Ill....more
In an important case of first impression that drew amicus participation from the Department of Justice, the Federal Trade Commission, and the International Franchise Association, the Seventh Circuit reversed a judgment in...more
A Virginia district court dismissed a lawsuit filed by 360 Painting, a franchisor of residential and commercial painting services, concluding an addendum to the parties’ franchise agreement precluded 360 Painting’s claims for...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
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 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 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 New Jersey has denied a motion to compel arbitration in a dispute over alleged breach of a franchise agreement. Passion for Restaurants, Inc. v. Villa Pizza, LLC, 2022 WL 18024209 (D.N.J. Dec. 30, 2022)....more
An appellate court in Louisiana recently affirmed summary judgment in favor of a franchisor, dismissing negligence and premises liability claims asserted by a customer was injured on unauthorized exercise equipment. Flynn v....more
Over the last several years, business-to-business “no-hire” and “no-poach” agreements have come under legal attack, including through enforcement actions by the Federal Trade Commission and criminal prosecutions by the...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
Welcome to The Franchise Memorandum by Lathrop GPM. Below are summaries of recent legal developments of interest to franchisors. Post-Termination Injunction: Noncompete Covenants - California Federal Court Enforces...more
A Minnesota federal court ruled in favor of a franchise broker on summary judgment. The court dismissed misrepresentation claims brought by a military veteran who alleged unlawful inducement to invest in a failed kickboxing...more
A federal court in Missouri ruled that a franchisee’s fraud claim cannot be based on the franchisor’s prediction at a franchise expo of future success in the franchised business....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
Court Dismisses Ostensible Agency Claim on Motion for Reconsideration - A federal court in California has granted a motion for reconsideration in light of recent Ninth Circuit precedent, reversing the district court’s...more
Franchise agreements give franchisors nearly absolute, unfettered discretion to control advertising of their brands. Franchisors need not regard prior course of dealings with franchisees. An Illinois federal court dismissed a...more
For a relationship to meet the legal definition of a "franchise" in some jurisdictions, the franchisor must give significant assistance to, or have significant control over, the franchisee's business. A franchisor's...more