Mealey's Franchise

  • October 17, 2019

    Putative ECOA Class Action Against Franchisor Dismissed With Prejudice

    WILMINGTON, Del. — A federal judge in Delaware on Oct. 9 dismissed with prejudice a putative class action filed against a tutoring and test preparation services franchisor, finding that because a prospective franchisee did not actually apply for financing credit, he lacked standing to allege a violation of the Equal Credit Opportunity Act (ECOA) (Herman Dhade, et al. v. Huntington Learning Centers, Inc., No. 17-1834, D. Del., 2019 U.S. Dist. LEXIS 175251).

  • October 17, 2019

    Dismissal Denied In Suit Over Realty Commission; U.S. Files Statements Of Interest

    KANSAS CITY, Mo. — A Missouri federal judge on Oct. 16 denied motions to dismiss filed in one of two class complaints pending in Missouri and Illinois accusing the National Association of Realtors (NAR) and certain real estate broker franchisors of conspiring to require home sellers to pay inflated broker commissions in violation of the Sherman Act (Joshua Sitzer, et al. v. The National Association of Realtors, et al., No. 19-332, W.D. Mo.).

  • October 16, 2019

    Burger King Franchisee’s Suit Over Forum Selection Clause Dismissed With Prejudice

    MIAMI — A Burger King franchisee when signing a franchise agreement also agreed to litigate any matters where there is federal jurisdiction within the U.S. District Court for the Southern District of Florida, a Florida federal judge ruled on Oct. 11, finding that the forum selection clause is enforceable and dismissing with prejudice the franchisee’s complaint seeking a declaration that it was invalid (Capital Restaurant Group, LLC v. Burger King Corporation, No. 19-22131, S.D. Fla., 2019 U.S. Dist. LEXIS 176821).

  • October 15, 2019

    No Abuse Of Discretion Found In Ohio Trial Court’s Ruling On Trade Secret Claims

    COLUMBUS, Ohio — A divided Ohio appeals panel on Sept. 30 ruled that a state trial court did not abuse its discretion in applying Ohio’s trade secrets act to find that a former employee of a boxing gym franchise and the gym he opened after the franchise closed misappropriated the franchise’s confidential and trade secret customer information when he accessed password-protected software to obtain its customer list to solicit customer business by email after the franchise ceased operations (MNM & MAK Enterprises LLC, et al. v. HIIT Fit Club LLC, et al., No. 18AP-980, Ohio App., 10th Dist., 2019 Ohio App. LEXIS 4076).

  • October 15, 2019

    Former Domino’s Delivery Driver Seeks Preliminary Approval Of Wage Settlement

    CHICAGO — A former pizza delivery driver who worked for two different Domino’s Pizza franchisees before bringing a collective and class action wage lawsuit on Oct. 9 moved for preliminary approval of a $807,500 settlement agreement with the franchisees (Samantha Young, et al. v. Rolling in the Dough, Inc., No. 17-7825, N.D. Ill.).

  • October 15, 2019

    Judge Dismisses Negligence Case Against Hotel Franchisor For Lack Of Jurisdiction

    PHILADELPHIA — Allegations that a South Carolina hotel owner owned and franchised hotels in Pennsylvania do not show that the hotel owner is “essentially at home” in the state, a federal judge in Pennsylvania ruled Oct. 9, dismissing a negligence case (Shirlyn B. Kurz v. Holiday Hospitality Franchising, LLC, et al., No. 19-2129, E.D. Pa., 2019 U.S. Dist. LEXIS 175193).

  • October 11, 2019

    Jan-Pro Seeks 9th Circuit Rehearing In Franchisee Classification Lawsuit

    SAN FRANCISCO — A cleaning service franchisor filed a petition on Oct. 8 seeking a panel rehearing or rehearing en banc after a Ninth Circuit U.S. Court of Appeals panel on Sept. 24 ruled that franchisees may proceed with claims that they are employees under the ABC test established in Dynamex Operations West Inc. v. Superior Court (Gerardo Vazquez, et al. v. Jan-Pro Franchising International, Inc., No. 17-16096, 9th Cir.).

  • October 10, 2019

    Judge Declines To Dismiss Franchisee’s Breach Of Contract Claim Against McDonald’s

    NEWARK, N.J. — In an age discrimination lawsuit, a federal judge in New Jersey on Sept. 30 refused to dismiss a franchisee’s breach of contract claim against McDonald’s USA LLC; however, the judge dismissed a claim for civil conspiracy and allegations of violations of the federal Racketeering Influenced and Corrupt Organizations Act and New Jersey’s RICO Act from a scheme to overcharge on purchases made from an approved vendor (Sebastian E. Lentini, et. al. v. McDonald’s USA, et. al., No. 19-4596, D. N.J., 2019 U.S. Dist. LEXIS 169180).

  • October 10, 2019

    In Virginia, Hotel Franchisor Awarded More Than $3M For Infringement

    ROANOAKE, Va. — Franchisees who continued using their former franchisor’s trademarks after their franchise agreement was terminated must pay $3,094,066 in connection with the infringement, a Virginia federal judge ruled Sept. 30 (Choice Hotels International Inc. v. A Royal Touch Hospitality LLC, et al., No. 17-381, W.D. Va., 2019 U.S. Dist. LEXIS 167904).

  • October 08, 2019

    Plaintiffs, Franchisor Oppose Production Of Confidential Spyware Suit Settlement

    ERIE, Pa. — On Oct. 4, a Wyoming couple who sued a rent-to-own (RTO) franchisor and franchisee over the installation of spyware on their laptop jointly filed a brief with the franchisor, with whom they recently settled their claims, opposing the franchisee’s motion to compel production of the confidential settlement agreement, asserting that a settlement is irrelevant to any remaining claims and defenses in the case (Crystal Byrd, et al. v. Aaron’s Inc., et al., No. 1:11-cv-00101, W.D. Pa.).

  • October 07, 2019

    Default Judgment Entered For Hotel Franchisor Enforcing Arbitration Award

    GREENBELT, Md. — A federal judge in Maryland on Sept. 23 entered judgment by default in favor of a hotel franchisor against a former franchisee in the amount awarded by an arbitrator when the franchisee failed to pay certain contractual obligations following foreclosure (Choice Hotels International, Inc. v. Rahi Corp., et al., No. 18-2955, D. Md., 2019 U.S. Dist. LEXIS 161683).

  • October 07, 2019

    Ohio Federal Judge Confirms Arbitration Award In Favor Of Franchisor

    AKRON, Ohio — An Ohio federal judge on Oct. 2 confirmed an arbitration award in favor of a franchisor because the defendants involved in the dispute over a breach of a franchise agreement pertaining to the operation of adult day care service facilities previously agreed that the arbitration agreement was binding on them (Sarah Adult Day Services Inc. v. Beyda Adult Day Care Center LLC et al., No. 19-614, N.D. Ohio, 2019 U.S. Dist. LEXIS 171125).

  • October 07, 2019

    Domino’s Pizza’s Petition Over Website Accessibility Denied By Supreme Court

    WASHINGTON, D.C. — In its Oct. 7 order list, the U.S. Supreme Court declined to enter the debate over what obligations the Americans With Disabilities Act (ADA) imposes upon a website operator in terms of making a website accessible to people with disabilities, denying a petition for certiorari by Domino’s Pizza LLC in a lawsuit brought by a blind man (Domino’s Pizza LLC v. Guillermo Robles, No. 18-1539, U.S. Sup.).

  • October 02, 2019

    Split 9th Circuit:  McDonald’s Isn’t Joint Employer Liable For Overtime Claims

    SAN FRANCISCO — McDonald’s Corp. and its subsidiaries aren’t a joint employer of franchised locations' workers and can’t be found liable for workers’ overtime claims, a split Ninth Circuit U.S. Court of Appeals panel ruled Oct. 1 (Guadalupe Salazar, et al. v. McDonald’s Corp., et al., No. 17-15673, 9th Cir., 2019 U.S. App. LEXIS 29500).

  • October 02, 2019

    Panel:  Gastropubs Franchisor Violated BOPA By Not Attaching A Guarantee

    TOLEDO, Ohio — A franchisor of gastropubs and its owner and manager violated the Ohio Business Opportunity Act (BOPA) by failing to attach a guarantee to a franchise agreement, an Ohio appeals panel held Sept. 30, reversing a lower court’s denial of summary judgment to a franchisee and grant of summary judgment to the franchisor (Burger Dynasty, Inc. v. Bar 145 Franchising, LLC, et al., No. L-19-1027, Ohio App., 6th Dist., 2019-Ohio-4006).

  • October 02, 2019

    5th Circuit:  Worker May Sue For Firing After Not Lying To Get Out Of Jury Duty

    NEW ORLEANS — A former Taco Bell franchisee’s worker who alleges that he was fired for refusing to lie to get out of jury duty may proceed with his lawsuit as the trial court erred in finding that there was no private cause of action under the relevant Mississippi statute and in finding no genuine dispute of material fact, a Fifth Circuit U.S. Court of Appeals panel ruled in a Sept. 27 per curiam opinion (Maxwell Simmons v. Pacific Bells, L.L.C., No. 19-60001, 5th Cir., 2019 U.S. App. LEXIS 29231).

  • September 30, 2019

    Maryland Comptroller: No Conflict Among States On Maryland Taxation Ruling

    WASHINGTON, D.C. — The Maryland comptroller of the Treasury argues in a Sept. 10 opposition brief with the U.S. Supreme Court that there is no conflict among the states on whether “a physically remote corporation’s exploitation of a state’s markets satisfies the constitutional requirements of substantial nexus for purposes of income taxes on business activity” (Staples, Inc., et al. v. Maryland Comptroller of the Treasury, No. 19-119, U.S. Sup.).

  • September 30, 2019

    Estate: Domino’s Franchise Operators Violated Labor Act With Delivery Drivers

    DAYTON, Ohio — A day after a ruling ordering the original plaintiff to arbitrate her claims, the executor of an estate filed a first amended complaint on Sept. 25 in an Ohio federal court, seeking to represent the estate and former delivery drivers over allegations that the operators of Domino’s Pizza franchises violated the wage and hour provisions of the Fair Labor Standards Act (FLSA) (Mary Buckles v. EUBA Corp., et al., No. 18-355, S.D. Ohio, 2019 U.S. Dist. LEXIS 163399).

  • September 25, 2019

    9th Circuit Certifies Retroactivity Question To California High Court

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Sept. 24 issued an order certifying a question to the California Supreme Court regarding the application of Dynamex Operations West Inc. v. Superior Court retroactivity and issued an opinion re-establishing its remaining holdings from a May 2 opinion in a case involving a franchisor’s classification of franchisees as independent contractors (Gerardo Vazquez, et al. v. Jan-Pro Franchising International, Inc., No. 17-16096, 9th Cir., 2019 U.S. App. LEXIS 28814).

  • September 25, 2019

    Settlement In 1 Wage Case Against Franchisees Won’t Stop 2nd Case From Proceeding

    SAN FRANCISCO — A settlement reached in one wage complaint against Jack In The Box franchisees brought under California’s Private Attorneys General Act (PAGA) doesn’t bar another putative class complaint alleging similar claims under wage-and-hour laws from proceeding, a federal judge in California ruled Sept. 23, denying the franchisees’ motion for summary judgment (Jennifer Garcia v. Central Coast Restaurants, Inc., et al., No. 18-2370, N.D. Calif., 2019 U.S. Dist. LEXIS 162588).