Mealey's Franchise

  • September 20, 2017

    Judge Finds Arbitrability Of Salon Franchise Dispute Must Be Arbitrated

    SEATTLE — After finding that a group of franchisees in a salon agreed that the issue of arbitrability must be decided by an arbitrator, a Washington federal judge on Sept. 13 granted the franchiser’s motion to stay the case pending arbitration (Anna A. Davis, et al. v. SEVA Beauty LLC, et al., No. 17-547, W.D. Wash., 2017 U.S. Dist. LEXIS 148434).

  • September 20, 2017

    Franchise Dispute To Proceed In Michigan Court

    DETROIT — A Michigan federal judge on Sept. 15 denied a motion to dismiss filed by the defendants in a breach of contract dispute after refusing to enforce the forum-selection clauses included in distribution and purchase agreements because the state of Michigan has a strong interest in allowing the dispute to proceed (Live Cryo LLC v. CryoUSA Import and Sales LLC, et al., No. 17-11888, E.D. Mich., 2017 U.S. Dist. LEXIS 149850).

  • September 20, 2017

    Federal Judge Vacates Ruling In Favor Of Franchisees In Dispute Over Choice Of Law

    PHOENIX — Four days after denying a franchiser’s motion to dismiss, an Arizona federal judge on Sept. 19 vacated his ruling in favor of franchisees in dispute over whether Ohio franchise statutes trump the franchise agreements' Arizona choice-of-law and venue provisions (Zounds Hearing Franchising LLC, et al., v. Edward T. Bower, et al., Nos. 16-01462, 16-01465, 16-01467, 16-01470 and 17-00728, D. Ariz., 2017 U.S. Dist. LEXIS 150078).

  • September 20, 2017

    Court Erred In Denying Franchisor’s Dismissal Motion Under Forum-Selection Clause

    DALLAS — A Texas panel on Sept. 12 found that a lower court abused its discretion in denying a franchiser’s motion to dismiss a lawsuit against it for violations of the Texas Deceptive Trade Practices Act (DTPA), finding that a business agreement’s forum-selection clause applied to the underlying claims and should have been enforced (In Re Bambu Franchising LLC, Bambu Desserts and Drinks, Inc., and Bambu IP, LLC, No. 05-17-00690, Texas App., 5th Dist., 2017 Tex. App. LEXIS 8681).

  • September 18, 2017

    Noting Limited Resources, California Federal Judge Dismisses EFTA Class Suit

    FRESNO, Calif. — A U.S. District Court for the Eastern District of California judge on Sept. 14 dismissed a class complaint accusing several gyms and their franchisor of violating the Electronic Funds Transfer Act (EFTA) following the transfer of memberships, but gave the plaintiffs one more opportunity to amend their complaint while warning them that the “Court’s resources are limited” and that the amended pleadings “will be considered to be the best the parties can present” (Jogert Abrantes, et al. v. Fitness 19 LLC, et al., No. 16-903, E.D. Calif., 2017 U.S. Dist. LEXIS 149435).

  • September 18, 2017

    Franchisee Seeks Reversal Of Denial Of Motion To Enforce Order Confirming Arbitration

    RICHMOND, Va. —A franchisee asked the Fourth Circuit U.S. Court of Appeals on Sept. 6 to reverse a lower federal court’s denial of her motion to enforce an order confirming arbitration in a dispute over the transfer of franchise agreements for two Subway sandwich shops as part of a divorce settlement (Kamaljit Nijjar v. Doctor’s Associates, Inc., No. 17-1812, 4th Cir.).

  • September 14, 2017

    7th Circuit Orders Judgment For Volvo On Dealer’s Bias Claim

    CHICAGO — A Seventh Circuit U.S. Court of Appeals panel on Aug. 28 reversed a denial of judgment as a matter of law for Volvo Trucks North America following a jury’s $6.5 million award for a dealership accusing the truck maker of unfair discrimination, finding that the dealer failed to provide evidence supporting an inference of discrimination (Andy Mohr Truck Center, Inc. v. Volvo Trucks North America, Nos. 16-2788 and 16-2839, 7th Cir., 2017 U.S. App. LEXIS 16406).

  • September 13, 2017

    Audi Dealers Sue Volkswagen Seeking Damages For ‘Criminal Conspiracy’ Of Fraud

    WEST PALM BEACH, Fla. — Audi automotive dealerships on Sept. 5 filed a lawsuit in a Florida federal court, alleging that Volkswagen’s criminal wrongdoing of deceiving emissions testers and regulators into believing that Audi-brand “clean diesel” turbo-charged direct ignition vehicles were complying with clean air regulatory limits caused them to suffer tarnished reputations and damage to their overall value and left them with unsalable inventory and dissatisfied customers (Braman Automotive Inc., et al. v. Volkswagen AG, et al., No. 17-81010, S.D. Fla.).

  • September 13, 2017

    Subway Defendants Must Provide Agreements In Suit Over Sexual Contact With Minor

    PIERRE, S.D. — A South Dakota federal magistrate judge on Aug. 31 ordered a Subway franchisee and other defendants accused of allowing one of the franchise owners to have sexual contact with a minor employee to comply with one of two discovery requests seeking defense agreements between the parties (Kerri Lureen, as guardian ad litem of S.L., a minor v. Christopher John Holl, et al., No. 17-4016, D. S.D., 2017 U.S. Dist. LEXIS 140420).

  • September 13, 2017

    Franchisee: No Arbitration Of Termination After Changes, Misrepresentations

    NEW ORLEANS — A franchisor’s misrepresentations coupled with changes to the business model and focus are grounds for termination of the franchise agreement and fall within the agreement’s propriety of termination exception to arbitration, a franchisee tells the Fifth Circuit U.S. Court of Appeals in its Aug. 29 reply brief (Charging Bison, LLC v. Interstate Battery Franchising & Development, Inc., No. 17-10509, 5th Cir.).

  • September 12, 2017

    Federal Judge Dismisses 2 Claims, Allows 2 Claims To Proceed In Franchise Dispute

    MIAMI — A Florida federal judge on Aug. 29 dismissed claims for violations of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) and the Florida Franchise Act but allowed promissory estoppel and breach of contract claims to proceed in a lawsuit brought by a former retailer of Pandora jewelry (Maurice's Jewelers II, Inc. v. Pandora Jewelry, LLC, et al., No. 16-25079, S.D. Fla., 2017 U.S. Dist. LEXIS 139262).

  • September 12, 2017

    3rd Circuit Affirms Finding That 7-Eleven Properly Terminated Agreements

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Aug.  24 affirmed a federal judge’s ruling that franchise agreements with an operator of six New Jersey 7-Eleven convenience stores were properly terminated based on the franchisee’s failure to withhold income taxes (7-Eleven Inc. v. Karamjeet Sodhi, et al., Nos. 16-3163, 17-1262, 3rd Cir., 2017 U.S. App. LEXIS 16177).

  • September 12, 2017

    Federal Judge Says Franchise, Developer Agreements Are Continuing Contracts

    OKLAHOMA CITY — An Oklahoma federal judge on Aug. 30 partially denied a motion for summary judgment filed by the defendants in a franchise agreement dispute after determining that each independent breach of the franchise and developer agreements by the defendants is subject to its own limitations period because the agreements at issue are continuing contracts (Express Services Inc. v. Don G. King et al., No. 15-1181, W.D. Okla., 2017 U.S. Dist. LEXIS 139721).

  • September 11, 2017

    Marriott Franchise Food Managers’ Overtime Claims Survive Dismissal Motion

    DETROIT — Marriott International Inc. only argued and failed to actually show that its franchise arrangements do not make it a joint employer of food and beverage managers (“food managers”) employed at its “Courtyard by Marriott” franchises, a Michigan federal judge ruled Sept. 6, denying a motion to dismiss overtime claims brought by the managers against Marriott (Stephane Parrott, et al. v. Marriott International, Inc., No. 17-10359, E.D. Mich., 2017 U.S. Dist. LEXIS 144277).

  • September 8, 2017

    Jack In The Box Franchisee Appeals Breach, Trademark Judgment To 9th Circuit

    SAN FRANCISCO — A trial court erred in granting judgment to Jack in the Box Inc. (JIB) on contractual and trademark infringement claims related to the termination of franchise agreements, an ex-franchisee of the fast-food chain argues in a Sept. 5 brief in the Ninth Circuit U.S. Court of Appeals, contending that genuine disputed issues of material fact exist (Jack in the Box Inc. v. Deepak Mehta, et al., No. 17-15336, 9th Cir.).

  • September 1, 2017

    Business Losses Are Earnings In Asbestos Case, Best Left To Jury, Judge Says

    NEW ORLEANS — How much if any economic damage a business suffered from the asbestos-related death of its principal falls under the umbrella of earnings and is up to a jury, a federal judge in Louisiana held Aug. 22 (Martha Denmon Storer, et al. v. Crown Cork & Seal Company Inc., et al., No. 14-2488, W.D. La., 2017 U.S. Dist. LEXIS 135241).

  • August 30, 2017

    Nevada Supreme Court Reinstates $6.7 Million Franchise Arbitration Award

    LAS VEGAS — The Nevada Supreme Court on Aug. 3 issued an order reinstating a $6.7 million arbitration award in a dispute over dental franchises, saying a county judge erred in reviewing de novo an arbitrator’s decision (Half Dental Franchise, LLC, et al. v. Robert Houchin, et al., No. 69577, Nev. Sup.).

  • August 28, 2017

    7th Circuit Panel Tosses ‘Worthless’ $525,000 Subway Footlong Sandwich Settlement

    CHICAGO — A Seventh Circuit U.S. Court of Appeals panel on Aug. 25 threw out a $525,000 settlement in a multidistrict litigation against the franchisor of Subway restaurants over the actual length of the chain’s “Footlong” submarine sandwiches, saying it yields “zero benefits for the class” (In Re:  Subway Footlong Sandwich Marketing and Sales Practices Litigation, Appeal of:  Theodore Frank, No. 16-1652, 7th Cir., 2017 U.S. App. LEXIS 16260).

  • August 25, 2017

    Illinois Panel: No Basis For Emotional Distress Claim In Secret Gym Taping Case

    OTTAWA, Ill. — An Illinois appeals panel on Aug. 23 affirmed dismissal of consolidated negligence and premises liability claims against a fitness franchisor and a Planet Fitness franchisee, agreeing with a trial judge that women who were secretly taped while undressed in gym tanning rooms had no cause of action for emotional distress damages (C.H. v. Pla-Fit Franchise, LLC, et al.; Kelly Otterness, et al. v. Pla-Fit Franchise, LLC, et al., No. 3-16-0378, Ill. App., 3rd Dist., 2017 Ill. App. LEXIS 544).

  • August 24, 2017

    Texas Federal Judge Tosses Negligence, Fraud Claims Against Franchise Officer

    HOUSTON — A Texas federal judge on Aug. 23 dismissed, without prejudice and with leave to amend, negligence and fraud claims against an aging center franchisor director for failure to state a claim (Houston ARX, LLC, et al. v. Mark Osborn, et al., No. H-17-519, S.D. Texas, 2017 U.S. Dist. LEXIS 135306).