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Mealey's Franchise

  • July 14, 2020

    Noncompete Provision Enforced; Preliminary Injunction Issued In Franchise Dispute

    MEMPHIS, Tenn. — A Tennessee federal judge on July 10 granted a plaintiff’s motion for a preliminary injunction to enforce a noncompete provision in a franchise agreement after determining that the franchisor met its burden of showing that the noncompete provision is  reasonable and that it will be irreparably harmed without a preliminary injunction (AmeriSpec LLC v. Sutko Real Estate Services Inc., et al., No. 20-2365, W.D. Tenn., 2020 U.S. Dist. LEXIS 121040).

  • July 13, 2020

    Arbitration Clauses In Franchise Agreements Are Enforceable, Judge Says

    SAN JOSE, Calif. — A California federal judge on July 9 granted a franchisor’s motion to stay a suit filed by franchisees because the franchise agreements include arbitration clauses requiring that any disputes arising under the franchise agreements be submitted to arbitration (Esguerra-Aguilar Inc., et al. v. Shapes Franchising LLC, et al., No. 20-574, N.D. Calif., 2020 U.S. Dist. LEXIS 120848).

  • July 10, 2020

    Judge:  Franchisee Fails To Show Violation Of Franchise Investment Protection Act

    SEATTLE — A franchisee did not present any new evidence that a franchisor of direct marketing services violated the Franchise Investment Protection Act (FIPA) by selling products and services to its franchisees “for more than a fair and reasonable price,” a Washington federal judge held July 6, denying partial summary judgment to the franchisee on his counterclaim (Money Mailer, LLC v. Wade G. Brewer, No. 15-1215, W.D. Wash., 2020 U.S. Dist. LEXIS 118110).

  • July 09, 2020

    Class Complaint Accuses McDonald’s Franchisee Of Biometric Data Collection

    WAUKEGAN, Ill. — The use by the owner of several McDonald’s franchises in Lake County, Ill., of a fingerprint scan to monitor employees’ work time is violating Illinois law by collecting, using, storing and disclosing employees’ biometric data, and a showing of actual damages is not necessary for a successful claim, a former employee alleges in her July 6 class complaint filed in the Lake County Circuit Court (Joanna Currie, et al. v. McEssy Investment Company, No. 2020CH04825, Ill. Cir., Lake Co.).

  • July 08, 2020

    Pennsylvania Federal Judge OKs Marriott Third-Party Claims Against Franchisees

    PHILADELPHIA — In a July 6 order, a federal judge in Pennsylvania cleared the way for defendant Marriott International Inc. to bring third-party claims in a lawsuit filed against the hotel franchisor by a sex trafficking victim; the same day, Marriott filed its third-party complaint against two Marriott franchisees and various accused sex traffickers (A.B. v. Marriott International Inc., No. 19-5770, E.D. Pa., 2020 U.S. Dist. LEXIS 117728).

  • July 07, 2020

    Ice Cream Franchisor’s Trade Secrets Suit Transferred To Delaware Court

    PHILADELPHIA — A federal judge in Pennsylvania on June 19 ruled that transfer of a franchisors’ trade secret misappropriation lawsuit against franchisees to Delaware federal court is proper based on the Third Circuit U.S. Court of Appeals’ multifactor balancing test (Sweet Charlie’s Franchising LLC v. Sweet Moo’s Rolled Ice Cream LLC, No. 19-4618, E.D. Pa., 2020 U.S. Dist. LEXIS 107675).

  • July 07, 2020

    Halal Guys Must Conduct 2nd Discovery Search In Dispute With Franchisee

    CHICAGO — Finding merit to a franchisee’s assertion of incomplete discovery responses from franchisor The Halal Guys Franchise Inc. (THG) due to the involvement of self-interested parties implicated in the contract dispute, an Illinois federal magistrate judge on July 1 granted the franchisee’s motion to compel a second search for responsive documents (H Guys LLC v. The Halal Guys Franchise Inc., No. 1:19-cv-04974, N.D. Ill., 2020 U.S. Dist. LEXIS 115000).

  • July 02, 2020

    Panel Issues Judgment To Math, Reading Center Franchisor In Negligence Suit

    HOUSTON — A lower court lacked jurisdiction over a Delaware franchisor of math and reading centers in a slip-and-fall lawsuit, a Texas appeals panel ruled June 30, reversing the denial of the franchisor’s special appearance and rendering judgment in its favor (Kumon North America Inc. v. Ngoc Vinh Nguyen, No. 14-18-00639-CV, Texas App., 14th Dist., 2020 Tex. App. LEXIS 4811).

  • July 02, 2020

    Banks’ Negligence Claim Over Sonic Data Breach Survives Dismissal

    CLEVELAND — Partly denying a motion to dismiss putative class claims brought by financial institutions (FIs) over a 2017 data breach experienced by Sonic Corp., an Ohio federal judge on July 1 found that the FIs sufficiently alleged that the fast food chain acted affirmatively in not updating the data security systems for the franchises that were affected by the breach (In re:  Sonic Corp. Customer Data Security Breach, No. 1:17-md-02807, N.D. Ohio, 2020 U.S. Dist. LEXIS 114891).

  • July 02, 2020

    Former Employee Of Franchisee Is Entitled To Overtime Pay, Magistrate Says

    SAN FRANCISCO — A California federal magistrate judge on June 30 partially granted a former employee’s motion for summary judgment against a franchisee after determining that the former employee met his burden of showing that he is entitled to overtime pay for hours worked in excess of eight hours per day (Decatuer Carter v. Jai-Put Enterprise Inc., et al., No. 18-6313, N.D. Calif., 2020 U.S. Dist. LEXIS 114299).

  • June 30, 2020

    Judge Denies Injunction To Chicken Wings Restaurant In Trademark Infringement Suit

    DETROIT — A chicken wings restaurant was denied a preliminary injunction on June 26 by a Michigan federal judge on claims for trademark and trade dress infringement and copyright infringement against another wings restaurant and its franchising company because many restaurants that serve chicken use circles or images of chicken in their logos (Eastpointe DWC, LLC v. Wing Snob Inc., et al., No. 19-13768, E.D. Mich., 2020 U.S. Dist. LEXIS 108526).

  • June 29, 2020

    In Little Caesars Franchise Row, 6th Circuit Affirms Preliminary Injunction

    CINCINNATI — A Michigan federal judge’s preliminary injunction barring the former franchisees of four Little Caesars from operating their restaurants or from continued use of the Little Caesars trademarks was not an abuse of discretion, the Sixth Circuit U.S. Court of Appeals ruled June 25 in an unpublished order (Little Caesars Enterprises Inc., et al. v. Miramar Quick Service Restaurant Corp., et al., No. 19-1860, 6th Cir., 2020 U.S. App. LEXIS 19962).

  • June 29, 2020

    8th Circuit Dismisses Lawsuits Against Comfort Nutrition Franchisors

    ST. LOUIS — In consolidated appeals, the Eighth Circuit U.S. Court of Appeals on June 24 upheld the dismissal of lawsuits brought by 11 franchisees of Complete Nutrition Franchising for failing to assert their breach of contract and breach of the implied covenant of good faith and fair dealing claims under Nebraska state law (Donovan Middleton, et al. v. Complete Nutrition Franchising, LLC, et al., No. 19-2886; Herman Hourie, et al. v. Complete Nutrition Franchising, LLC, et al., No. 19-2887; Edgar Rojas, et al. v. Complete Nutrition Franchising, LLC, et al., No. 19-2888; Bright Future Holdings, LLC v. Complete Nutrition Franchising, LLC, et al., No. 19-2889; Vivify, Inc. v. Complete Nutrition Franchising, LLC, et al., No. 19-2890; Warrior Fitness & Nutrition, LLC v. Complete Nutrition Franchising, LLC, et al., No. 19-2891; Katherina Jerak v. Complete Nutrition Franchising, LLC, et al., No. 19-2893; M.G. Nutrition, LLC v. Complete Nutrition Franchising, LLC, et al., No. 19-2894, 8th Cir., 2020 U.S. App. LEXIS 19619).

  • June 29, 2020

    Plaintiffs Granted Leave To Amend Complaint Alleging Violations Of Disabilities Act

    SAN JOSE, Calif. — A California federal judge on June 25 granted a franchisor’s motion to dismiss with leave for the plaintiffs to amend their complaint alleging that the franchisor violated their rights under the Americans with Disabilities Act (ADA) by not offering counter services  after a certain hour of the night because the plaintiffs failed to sufficiently allege that the franchisor owns or co-owns the restaurants visited by the plaintiffs (Jesse Zamora, et al. v. Wendy’s International LLC, No. 19-6133, N.D. Calif., 2020 U.S. Dist. LEXIS 111636).

  • June 26, 2020

    Judge Decides Injunction In McDonald’s Employees’ COVID-19 Nuisance Suit

    CHICAGO — An Illinois judge on June 24 denied a preliminary injunction against McDonald’s Corp. and McDonald’s USA LLC but ordered an Illinois operation and a franchise owner to offer better protocols for employees in light of the COVID-19 pandemic (Taynarvis Massey, et al. v. McDonald’s Corporation, et al., No. 20 CH 4247, Ill. Cir., Cook Co.).

  • June 26, 2020

    7-Eleven Franchisee’s Wage Suit Against Franchisor Dismissed Due To No Agreement

    CHICAGO — A federal judge in Illinois on June 18 dismissed a 7-Eleven franchisee’s putative class complaint for wages filed against the franchisor, ruling that the profit-sharing agreement contained within the franchise agreement is based on sales only and is not a wage agreement (Niral Patel, et al. v. 7-Eleven, Inc., No. 18-7010, N.D. Ill., 2020 U.S. Dist. LEXIS 106827).

  • June 25, 2020

    Auto Text Messages Class Suit Settled By Franchisee For $4 Million

    FRESNO, Calif. — A federal judge in California on June 19 granted final approval of a $4 million class settlement to be paid by a fast food franchisee to end claims over ads sent via text messages (Cory Larson, et al. v. Harman-Management Corporation, No. 16-219, E.D. Calif., 2020 U.S. Dist. LEXIS 107938).

  • June 25, 2020

    Magistrate Judge Recommends Denying Franchisor’s Motion For Injunctive Relief

    MIAMI — A Florida federal magistrate judge on June 19 recommended denying a franchisor’s motion for a preliminary injunction in a dispute over a franchise agreement for food delivery services because the franchisor never provided any unique training to the franchisee (Delivery.com Franchising LLC v. Patrick Moore, No. 20-20766, S.D. Fla., 2020 U.S. Dist. LEXIS 108359).

  • June 25, 2020

    California McDonald’s Closed Until Hearing In COVID-19 Nuisance Suit

    ALAMEDA, Calif. — A McDonald’s in Oakland, Calif., was ordered to remain closed by a state trial judge on June 22 until a decision is made on a pending motion for temporary restraining order brought by current employees in their public nuisance and public health case asking that the franchise’s owners improve their COVID-19 safety protocols (Yamilett Olimara Osoy Hernandez, et al. v. VES McDonald’s, et al., No. RG20064825, Calif. Super., Alameda Co.).

  • June 22, 2020

    Suit Alleges McDonald’s Franchisee Failed To Protect Employees From COVID-19

    ALAMEDA, Calif. — A McDonald’s restaurant franchisee should be ordered to remain closed because the restaurant failed to take necessary precautions against the spread of COVID-19, which resulted in the spread of the novel coronavirus to a number of employees and the employees’ families, and failed to provide its employees with proper personal protective equipment or information to combat the spread of the virus, the employees say in a June 16 complaint and an application for a temporary restraining order, both filed in California state court (Yamilett Olimara Osoy Hernandez v. VES Mc Donald’s, et al., No. RG20064825, Calif. Super., Alameda Co.).