Mealey's Franchise

  • November 21, 2017

    Franchise Agreement’s Arbitration Provision Survives Rescission, Federal Judge Says

    BALTIMORE — A Maryland federal judge on Nov. 16 found that despite a franchisee’s acceptance of a franchisor’s rescission offer, the arbitration provision in their franchise agreement is valid and the issues alleged in the complaint are arbitrable (Donald Burrell, et al. v. 911 Restoration Franchise Inc., et al., No. 17-2278, D. Md., 2017 U.S. Dist. LEXIS 190308).

  • November 21, 2017

    Pennsylvania Federal Magistrate Recommends Granting Permanent Injunction

    PITTSBURGH — A Pennsylvania federal magistrate judge on Nov. 7 recommended granting a franchisor’s motion for preliminary and permanent injunction after determining that the franchisor suffered irreparable harm by the franchisee’s establishment and operation of a similar business in breach of the parties’ franchise agreement (Huntington Learning Centers Inc. v. Barbara Kearns-Jones, et al., No. 17-1174, W.D. Pa., 2017 U.S. Dist. LEXIS 185270).

  • November 20, 2017

    Judge Allows 2 Claims To Proceed In Franchisees’ Dispute With Tim Hortons USA

    MIAMI — A Florida federal judge on Nov. 8 denied a franchisor’s motion to dismiss breach of contract and tortious interference claims brought by five franchisees but dismissed all the other claims in their lawsuit arising from the franchisor’s refusal to approve their requests to sell their franchised businesses (Picktown Foods, LLC, et al. v. Tim Hortons USA, Inc., No. 17-21072, S.D. Fla., 2017 U.S. Dist. LEXIS 186107).

  • November 20, 2017

    Judge Dismisses Breach Of Contract Dispute For Lack Of Personal Jurisdiction

    FORT MYERS, Fla. — A Florida federal judge on Nov. 16 concluded that he lacks personal jurisdiction over the defendants in a breach of contract dispute brought by franchisors (Dollar Rent A Car, Inc., et al. v. Westover Car Rental, LLC, et al., No. 16-363, M.D. Fla., 2017 U.S. Dist. LEXIS 189422).

  • November 20, 2017

    Louisiana Federal Judge Says Claims Fail; No Franchise Agreement Existed

    NEW ORLEANS — A Louisiana federal judge on Nov. 15 granted a franchisor’s motion for summary judgment after determining that the plaintiffs’ breach of contract claim fails because the franchisor did not sign the closing documents necessary to establish a franchise agreement (CG & JS Enterprises LLC, et al. v. H&R Block Inc., et al., No. 14-1322, E.D. La., 2017 U.S. Dist. LEXIS 188784).

  • November 17, 2017

    Former Distributor’s Suit Not Filed Within 1 Year As Required By Agreement

    MILWAUKEE — A Wisconsin federal judge on Oct. 31 granted a defendant’s motion to dismiss a former distributor’s complaint alleging a number of violations of various states’ franchise laws after determining that the plaintiff did not file suit within a year as required by the one-year statute of limitations in the applicable distributor agreement (Faxon Sales Inc. v. U-Line Corp., No. 17-872, E.D. Wis., 2017 U.S. Dist. LEXIS 179811).

  • November 16, 2017

    Missouri High Court Vacates Damages Award On Claim Brought Under Franchise Act

    JEFFERSON CITY, Mo. — The Missouri Supreme Court on Oct. 31 partly reversed a lower court’s judgment in favor of a distributor in its lawsuit against a manufacturer of aircraft instruments, remanding the case for a new trial on damages for the distributor’s claim that the manufacturer violated Missouri’s Franchise Act (Sun Aviation Inc. v. L-3 Communications Avionics Systems Inc., No. SC96280, Mo. Sup., 2017 Mo. LEXIS 486).

  • November 15, 2017

    Jack In The Box Says Terminated Agreement Ended Franchisee’s Trademark Rights

    SAN FRANCISCO — In a Nov. 6 brief, Jack in the Box Inc. asks the Ninth Circuit U.S. Court of Appeals to affirm a trial court’s finding that a former franchisee engaged in infringement by continuing to use the “Jack in the Box” trademarks after its franchise agreement was terminated for contractual breaches (Jack in the Box Inc. v. Deepak Mehta, et al., No. 17-15336, 9th Cir.).

  • November 13, 2017

    Judge Dismisses Amended Complaint In Franchise Dispute For Lack Of Jurisdiction

    NEWARK, N.J. — Finding that a New Jersey federal court lacks jurisdiction, a judge on Oct. 26 granted a franchisor’s motion to dismiss a franchisee’s lawsuit arising from the operation of “BBQ Chicken Restaurant” (Sunghoon Kim, et al. v. Genesis Co., Ltd, et al., No. 15-8556, D. N.J., 2017 U.S. Dist. LEXIS 178525).

  • November 13, 2017

    Panel Finds D.C. Had Standing To Sue Exxon, Reverses Dismissal Of Case

    WASHINGTON, D.C. — In a majority ruling, the District of Columbia Court of Appeals on Nov. 9 reversed a trial court’s ruling in favor of a franchisor of gas stations, finding that the District of Columbia did not lack standing to sue the franchisor for violations of district law in relation to certain agreements with distributors (District of Columbia v. ExxonMobil Oil Corporation, et al., No. 14-CV-633, D.C. App., 2017 D.C. App. LEXIS 339).

  • November 13, 2017

    Panel Reverses Finding That Insurer Has Duty To Defend, Indemnify Franchisee

    TRENTON, N.J. — A New Jersey appeals panel on Nov. 8 found that although a lower court properly found that a franchisee’s vehicle was a covered auto under an automobile liability insurance policy that was issued to the franchisor, the clear and unambiguous policy language fails to support a finding that the franchisee was an insured under the policy (Peter Fontana, et al. v. Executive Cars, et al., No. A-3151-15T4, N.J. Super., App.  Div., 2017 N.J. Super. Unpub. LEXIS 2794).

  • November 13, 2017

    Plaintiffs Sufficiently Proved Franchisor Is Vicariously Liable In Discrimination Suit

    PITTSBURGH — A Pennsylvania federal judge on Nov. 8 denied a motion to dismiss filed by the defendants in a sexual harassment and gender discrimination suit after determining that the plaintiff sufficiently proved that the franchisor was vicariously liable for the franchisee’s actions because the franchisor controlled the franchisee’s store where the plaintiff worked through its policies, regulations and procedures (Hannah Harris v. Midas, et al., No. 17-95, W.D. Pa., 2017 U.S. Dist. LEXIS 184765).

  • November 9, 2017

    Federal Judge Grants Gas Station Franchisees’ Motion For Preliminary Injunction

    HARTFORD, Conn. — A Connecticut federal judge on Nov. 6 granted three franchisees’ motion for a preliminary injunction seeking to enjoin a third party’s purchase of their Hess-branded retail gasoline stations from the franchisor (Fairy-Mart, et al. v. Marathon Petroleum Company LP, et al., No. 17-1195, D. Conn., 2017 U.S. Dist. LEXIS 183642).

  • November 9, 2017

    House Passes Bill That Rolls Back Treatment Of Joint Employers

    WASHINGTON, D.C. — The U.S. House of Representatives on Nov. 7 passed with a 242-181 vote a bill that rolls back the joint-employer standard that was implemented under President Barack Obama.

  • November 2, 2017

    VW Franchise Dealers’ Claims Over Defeat Devices Survive Dismissal Motion

    SAN FRANCISCO — A U.S. District Court for the Northern District of California judge on Oct. 30 denied a motion by Bosch GmbH and Bosch LLC (collectively, Bosch) to dismiss a second amended class complaint filed by Volkswagen-branded franchise dealers who accuse Bosch of conspiring with Volkswagen AG and related entitled to develop and use defeat devices in Volkswagen’s “clean diesel” vehicles to evade United States emission standards (In re:  Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, No. 15-2672, N.D. Calif., 2017 U.S. Dist. LEXIS 179652).

  • November 1, 2017

    Judge Grants Injunctive Relief To Gas Station Franchisee Under PMPA

    CHICAGO — After finding that a substantive dispute exists as to whether a gas supplier was required to give a gas station notice and opportunity to cure before terminating a franchise agreement, an Illinois federal judge on Oct. 27 partially granted a motion for injunctive relief under the Petroleum Marketing Practices Act (PMPA) (Catch 26, LLC, et al. v. LGP Realty Holdings, LP, No. 17-cv-6135, N.D. Ill, 2017 U.S. Dist. LEXIS 178585).

  • November 1, 2017

    Massachusetts Justice: 3-Tier Franchise Structure Doesn’t Eliminate Liability

    WOBURN, Mass. — A cleaning company’s three-tier franchise structure “is effectively an attempt to accomplish an end run around the Independent Contractor Statutes” and doesn’t clear the company of liability for wage violations brought by individual cleaners, a Massachusetts justice ruled Oct. 2 (Luis Thomaz Da Costa, et al. v. Vanguard Cleaning Systems, Inc., No. MICV2015-04743, Mass. Super., Middlesex Co., 2017 Mass. Super. LEXIS 158).

  • November 1, 2017

    Dealership: Destruction Of Stock Sale Transaction Violates Right Of 1st Refusal

    RICHMOND, Va. — A dealership and its subsidiaries in a recent brief argue to the Fourth Circuit U.S. Court of Appeals that a lower federal court ruling that allowed Volvo Trucks North America LLC to destroy a stock sale transaction violated “the very concept of a right of first refusal that is protected by statute—to allow franchisors to step into the shoes of a buyer” (Volvo Group North America, et al. v. Truck Enterprises Inc., et al., No. 17-1638, 4th Cir.).

  • November 1, 2017

    California Panel Says Trial Court Properly Issued Injunction Against Franchisees

    LOS ANGELES — The Second District California Court of Appeal on Oct. 23 affirmed a trial court’s issuance of a preliminary injunction in favor of a franchisor because it is undisputed that franchisees breached the franchise agreements and were infringing on the franchisor’s trademarks by continuing to use the marks after the franchise agreements were terminated (Famous Dave’s of America Inc. v. SR El Centro FD Inc., et al., No. B276088, Calif. App., 2nd Dist., Div. 4, 2017 Cal. App. Unpub. LEXIS 7263).

  • October 30, 2017

    Termination Of Franchise Agreement Warranted For Breach Of Agreement

    MIAMI — Noting that a franchisor may have taken a “No More Mister Nice Guy” approach when it terminated a franchise agreement based on the franchisee’s breach of the agreement’s payment obligations, a Florida federal magistrate judge on Oct. 25 said the termination of the agreement was within the franchisor’s rights per the agreement’s terms (Tim Hortons USA Inc. v. Gurvinder Singh, No. 16-23041, S.D. Fla., 2017 U.S. Dist. LEXIS 176719).