Mealey's Franchise

  • February 08, 2021

    Federal Judge Upholds Claims Against In-Home Care Franchisees, Grants Injunction

    LINCOLN, Neb. — A Nebraska federal judge refused on Feb. 4 to dismiss or stay an in-home care franchisor’s breach of contract claims against former franchisees in favor of a wrongful death action pending in an Alabama state court against the franchisees.  In a separate ruling on Jan. 29, the judge agreed to impose a preliminary injunction against the former franchisees to keep them from violating the franchise agreements’ non-compete clauses.

  • February 05, 2021

    New Jersey Judge Transfers Trampoline Park Franchise Agreement Suit To Texas Court

    NEWARK, N.J. — A New Jersey federal judge on Jan. 31 transferred to Texas an action brought by an association representing trampoline park franchises alleging that a franchisor made unilateral changes to the franchise agreements, citing the doctrine of forum non conveniens and the franchise agreements’ forum-selection clauses.

  • February 05, 2021

    Burger King Opposes Reconsideration In Franchise Closure Dispute

    MIAMI — Burger King Corp., which was awarded summary judgment on Dec. 22 by a federal judge in Florida in its lawsuit accusing a franchisee of breaching its agreement by closing a restaurant without consent, filed a memorandum on Feb. 2 opposing the franchisee’s motion for reconsideration.

  • February 03, 2021

    9th Circuit Vacates, Remands Franchise Wage Case After Dynamex Ruling

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Feb. 2, in light of the California Supreme Court’s recent ruling that Dynamex Operations West, Inc. v. Superior Court applies retroactively in nonfinal cases, issued an amended opinion vacating a summary judgment ruling for the franchisor in a wage complaint by janitors alleging misclassification and remanded for the district court to consider whether the janitors are employees under the Dynamex standard in the first instance.

  • February 02, 2021

    New Jersey Federal Judge: Gas Station Franchise Entitled To Fees, Costs

    TRENTON, N.J. — A federal judge in New Jersey on Jan. 22 awarded a gas station franchise $100,276.93 in attorney fees and costs after it prevailed on allegations that a gas distributor violated the Petroleum Marketing Practices Act (PMPA).

  • February 01, 2021

    9th Circuit Rejects Bid By Volkswagen Franchises To Press RICO Claims

    SAN FRANCISCO — In a Jan. 26 holding, the Ninth Circuit U.S. Court of Appeals left intact a California federal judge’s determination that allegations that a German multinational engineering and technology company and its subsidiary violated the Racketeer Influenced and Corrupt Organizations (RICO) Act in connection with Volkswagen’s buyback program fail.

  • February 01, 2021

    Burger King Tells 11th Circuit Franchisees’ Alleged No-Hire Conspiracy Not Possible

    ATLANTA — Burger King’s corporate entities filed an appellee brief on Jan. 27, arguing to the 11th Circuit U.S. Court of Appeals that a lower court correctly held that the fast food giant and its franchisees were incapable of conspiring to ensure that the franchisees did not recruit or hire each other’s employees.  In their proposed class action, three employees say the alleged no-hire agreement led to depressed wages.

  • January 28, 2021

    Texas Holiday Inn Operator Sued By EEOC For Pregnancy Discrimination

    CORPUS CHRISTI, Texas — The Equal Employment Opportunity Commission filed a complaint on Jan. 25 in a federal court in Texas accusing Awon Phie LLC, doing business as Holiday Inn Express & Suites, of firing a temporary employee because she was pregnant.

  • January 28, 2021

    Hand And Stone’s Reargument Request Denied In Sexual Assault Liability Suit

    GEORGETOWN, Del. — A Delaware judge on Jan. 22 denied a motion for reargument filed by a spa franchisor, leaving untouched a denial of a motion to dismiss a lawsuit concerning liability for an alleged sexual assault by a franchisee’s former employee, but leaving open the possibility for additional motions following discovery.

  • January 27, 2021

    Judge: Fact Issues Exist As To Whether Insurer Failed To Settle Franchise Dispute

    NASHVILLE, Tenn. — A federal judge in Tennessee on Jan. 25 held that a material factual dispute precludes summary judgment as a matter of law in favor of a plaintiff on its claim that a professional liability insurer acted in bad faith for failing to settle within policy limits an underlying breach of contract and fraud lawsuit brought by the plaintiff against a franchisor insured.

  • January 25, 2021

    U.S. High Court Denies Review Of Domino’s Franchisee Worker’s Arbitration Issue

    WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 25 denied a petition for writ of certiorari filed by a Domino’s franchisee employee, who argued that “clear and unmistakable evidence” must exist in an arbitration agreement for a court to find that the parties agreed that an arbitrator rather than the court will decide questions of arbitrability.

  • January 25, 2021

    New York Justice Refuses To Hold Domino’s Liable For Franchisees’ Wage Violations

    NEW YORK — Following a bench trial, a New York justice on Jan. 5 rejected the state attorney general’s allegations that Domino’s Pizza misled franchisees about the capabilities of the chain’s store management software program, which resulted in franchisees violating state labor laws by miscalculating wages and underpaying certain categories of employees.

  • January 25, 2021

    California Moves To Dismiss Franchise Groups’ Suit Over Independent Contractor Test

    SAN DIEGO — The state of California on Jan. 14 moved to dismiss a suit filed by four franchising-related associations in a federal court challenging the constitutionality of the state’s “ABC Test,” used to determine whether a worker is an employee or independent contractor.  The state argues, among other things, that the ABC Test does not interfere with any congressional objective in the Federal Trade Commission’s Franchise Rule or the Lanham Act.

  • January 25, 2021

    Judge Refuses To Dismiss Vicarious Liability Claim Against Hand And Stone Franchise

    GEORGETOWN, Del. — A Delaware judge on Jan. 7 denied Hand and Stone Franchise Corp.’s motion to dismiss a vicarious liability claim arising from an alleged sexual assault by its former employee, finding that the plaintiff has sufficiently pleaded averments to survive a dismissal motion.

  • January 25, 2021

    Franchisor’s Motion For Contempt Over Signage, Franchisees’ Webpages Denied

    MINNEAPOLIS — A federal judge in Minnesota on Jan. 4 denied without prejudice an acupuncture franchisor’s motion for a finding of contempt against franchisees in Colorado that have failed to cover exterior signage with the franchisor’s logo and remove from their webpages any reference to the franchisor, holding that franchisees are attempting in good faith to comply with the terms of an Oct. 28 preliminary injunction order.

  • January 24, 2021

    New York Hotel Franchisee Alleges Lender Is Using Pandemic To Take Over Property

    NEW YORK — A DoubleTree by Hilton hotel franchisee sued its commercial mortgage lender in a New York state court on Jan. 7, alleging that the lender is using the franchisee’s failure to meet its loan obligations due to the COVID-19 pandemic to take control of the hotel.

  • January 22, 2021

    Franchise Broker Being Sued For Fraud Notifies Court Of Parallel Proceedings

    MINNEAPOLIS — FranChoice Inc., a franchise broker, and its consultants being sued in approximately a dozen cases brought by franchisees who are accusing the broker of using fraudulent and unlawful sales tactics in connection with iLoveKickboxing.com (ILKB) franchises filed a letter on Dec. 28 in a Minnesota federal notifying the court that plaintiffs in three of the cases have filed parallel proceedings against ILKB in a federal court in New York.

  • January 22, 2021

    Split Florida Appeals Panel: Franchisor Has No Liability For Shooting By Franchisee

    WEST PALM BEACH, Fla. — A franchisor that has no “substantial control” over its franchisees pursuant to its franchise agreement has no legal duty to a franchisee’s employee who was shot by the franchise owner, a divided Florida appellate panel ruled Jan. 20.

  • January 21, 2021

    Judge Won’t Rethink Economic Loss Rule Application In Sonic Data Breach Suit

    CLEVELAND — An Ohio federal judge’s decision to permit financial institutions (FIs) to pursue negligence claims against Sonic Corp. over a 2017 data breach will stand, the judge ruled Jan. 19, denying the fast food chain’s motion for reconsideration and finding no merit to Sonic’s assertion that the economic loss doctrine should have been applied to bar the banks’ claim.

  • January 21, 2021

    Labor Secretary, Groups Argue For Reversal Of Joint Employment Ruling

    NEW YORK — The U.S. secretary of Labor and trade groups separately filed appellant briefs on Jan. 15 in the Second Circuit U.S. Court of Appeals seeking reversal of a trial court’s ruling for various states deeming the portions of the U.S. Department of Labor’s (DOL) final rule revising its regulations interpreting vertical joint employer liability as “arbitrary and capricious,” in conflict with the Fair Labor Standards Act (FLSA) and “flawed in just about every respect.”

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