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Before committing to a franchise business, consider...
A federal court in Michigan has granted a franchisor’s motion for preliminary injunction against former franchisees for violating the franchise agreements’ post-termination noncompete provisions. 1-800 Water Damage Int’l LLC...more
A federal court in New Jersey recently granted a franchisor’s motion for a preliminary injunction, enjoining the former franchisee from using the franchisor’s marks and violating the franchise agreement’s noncompete clause,...more
On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a Non-Compete Clause Rule that would ban most non-compete clauses in agreements between businesses and their “workers.” The final rule will take effect 120...more
On April 23, 2034, the Federal Trade Commission (FTC) issued a final rule intended to ban the use and enforcement of most non-compete clauses signed by workers. The new rule is not in effect yet. It will become...more
Reflecting a shifting national landscape on restrictive covenants, the Minnesota Legislature recently adopted legislation that prohibits franchisors from placing certain nonsolicitation and no-poach restrictions in franchise...more
In June 2021, the Supreme Court reaffirmed in NCAA v. Alston that antitrust claims under Section 1 of the Sherman Act “presumptively” call for rule-of-reason analysis and that only the rare case merits “quick look” or per se...more
Franchisors and franchisees in California have long conducted themselves based on precedent that voids post-termination covenants against competition in a franchise agreement in California. Recently, a franchisor’s ability to...more
Yesterday, Washington’s Governor, Jay Inslee signed HB1450 [PDF] which targets the use of restrictive covenants in the State of Washington (the “Non-Compete Act”). The signing of the Non-Compete Act follows the recent...more
In order to avoid a lawsuit by the Washington State Attorney General, seven fast-food chains with store locations nationwide agreed to no longer enforce “no-poach/no-hire” provisions in their franchise agreements and to...more
We reported last week that the attorneys generals of ten states are investigating several fast food franchisors for their use of so-called “no poach” provisions in their franchise agreements. ...more
In Devore v. H&R Block, the franchisor H&R Block was found to have lawfully terminated a franchisee for violating an in-term non-compete covenant, because the franchisee permitted its office manager and prior operator of the...more
Many franchise agreements contain a provision that restricts a franchisee from hiring or soliciting the employees of the franchisor or other franchisees. A class action lawsuit that was recently filed in the Eastern District...more
In a meaty decision involving the intersection of restrictive covenant and franchise law, the United States District Court for the Southern District of Ohio recently denied a request by D.P. Dough Franchising, LLC (“D.P....more
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
This Thanksgiving, Trade Secrets Watch is serving a delicious tale about protecting trade secrets in a franchising relationship. In 1994, Quizno’s entered into a franchise agreement with Robert Kampendahl, an...more
Timely Topics - A non-compete clause, covenant not to compete or restrictive covenant is a contract provision under which one party agrees not to enter into or start a similar profession, trade or business in competition...more
When seeking preliminary injunctive relief to enforce a non-compete, the moving party is often focused on how obvious it is that the defendant breached the parties’ agreement. As 7-Eleven recently learned, however, even when...more