Mealey's Franchise

  • December 31, 2020

    Black Former Franchisees’ Amended Complaint Fails To Correct Defects, McDonald’s Says

    CHICAGO — In a second motion to dismiss, McDonald’s USA LLC and McDonald’s Corp. (collectively, McDonald’s) argue in a Dec. 21 memorandum to a federal Illinois court that an amended complaint filed by Black former franchisees continues to assert largely untimely claims of racial discrimination that fail to meet federal pleading requirements.

  • December 31, 2020

    Burger King Employees File Corrected Brief In Hiring Ban Appeal

    ATLANTA — Employees alleging that an agreement between a fast food franchisor and its franchisees not to recruit or hire each other’s employees led to depressed wages filed a new appellant brief in the 11th Circuit U.S. Court of Appeals on Dec. 15 to correct two citation errors.

  • December 22, 2020

    Tim Hortons Franchisees’ Group Lacks Standing To Assert Claims Over Supplier Scheme

    MIAMI — A Florida federal judge on Dec. 21 determined that an association of Tim Hortons franchisees does not have associational standing to assert claims on behalf of its members because the association failed to allege any plausible threats of future harm related to the franchisor’s requirement to require franchisees to buy products from specific suppliers (Great White North Franchisee Association-USA Inc. v. Tim Hortons USA Inc., et al., No. 20-20878, S.D. Fla., 2020 U.S. Dist. LEXIS 239160).

  • December 22, 2020

    $350,708 Attorney Fee Award To Franchisor Vacated By Missouri Appeals Court

    SPRINGFIELD, Mo. — A Missouri appeals court on Dec. 16 reversed a $350,708 attorney fees award to an adult-themed novelty products retail franchisor and remanded to the trial court to amend its judgment in its action against a former franchisee whose husband launched a similar business at the same location (AEFC Inc. v. Tammy D. Vietti, et al., No. SD36137, Mo. App., Southern Dist., Div. 2, 2020 Mo. App. LEXIS 1622).

  • December 18, 2020

    Franchisee’s Interlocutory Appeal Of Transfer Order Rejected By Federal Judge

    HARTFORD, Conn. — An aircraft dealership failed to show that Connecticut has a strong public policy against allowing a franchisee to agree to litigate franchise agreement disputes outside the state, a Connecticut federal judge held Dec. 14 in refusing to certify for interlocutory appeal his decision to transfer the action to Florida (Columbia Aircraft Sales Inc. v. Piper Aircraft Inc., No. 20-701, D. Conn., 2020 U.S. Dist. LEXIS 234889).

  • December 18, 2020

    Federal Judge Lets Guest’s Racial Bias Claims Proceed Against Hotel Franchise

    RICHMOND, Va. — A Black hotel guest sufficiently alleged that a security guard discriminated and committed a hate crime against him under federal and state statutes when he repeatedly asked the guest in the hotel lobby if he “belonged there” and requested identification, a Virginia federal judge concluded Dec. 4 in refusing to dismiss the claims against Hilton hotel franchise owners and operators and security service provider (Albert Law v. Hilton Domestic Operating Co. Inc., et al., No. 20-145, E.D. Va., 2020 U.S. Dist. LEXIS 228423).

  • December 17, 2020

    Kuwaiti Car Dealer, Ford Motor Co. Both To Appeal Dismissal Of Contract Row

    CINCINNATI — Ford Motor Co. on Nov. 23 filed a notice of cross-appeal in a federal court in Michigan, indicating its intent to bring before the Sixth Circuit U.S. Court of Appeals for the second time a Kuwaiti car dealership’s breach of contract suit against it in which the parties have disputed whether the Motor Vehicle Franchise Contract Arbitration Fairness Act (Fairness Act) applies to foreign dealers and, as such, whether the claims should be arbitrated (Arabian Motors Group W.L.L. v. Ford Motor Company, No. 16-13655, E.D. Mich.).

  • December 17, 2020

    Federal Judge Denies Urgent Care Franchisee’s Bid To Halt Franchise Sales

    HARTFORD, Conn. — A Connecticut federal judge on Dec. 2 refused to reconsider her Nov. 25 refusal to grant a temporary restraining order (TRO) to a franchisee of Doctors Express Urgent Care facilities, in which she concluded that the franchisee failed to provide evidence of irreparable harm if the franchisor moved forward with the purchase of certain franchises in the franchisee’s territory (Danilo Purugganan v. AFC Franchising LLC, No. 20-360, D. Conn., 2020 U.S. Dist. LEXIS 221288 and 2020 U.S. Dist. LEXIS 225638).

  • December 17, 2020

    New York Justice Stays Suit Over Failed Subway Shops Pending Arbitration

    NEW YORK — A New York justice granted Subway franchise defendants’ motions to stay pending arbitration a fraud suit brought by a franchisee over seven failed sandwich shops, concluding on Dec. 2 that the agreements between the parties clearly stated that an arbitrator must decide issues of arbitrability (Charles Fritschler, et al. v. Draper Management LLC, et al., No. 652056/2019, N.Y. Sup., New York Co., 2020 N.Y. Misc. LEXIS 10324).

  • December 17, 2020

    Florida Burger King Franchisees May Allege Counterclaim Over Sale Of Restaurants

    MIAMI — A Florida federal judge on Dec. 10 dismissed in part second amended counterclaims filed by Burger King franchisees sued for failing to pay amounts allegedly owed to their franchisor.  The judge rejected the franchisees’ argument that Burger King failed to provide adequate training but upheld their counterclaim that the franchisor refused to approve or deny the sale of certain restaurants (Burger King Corp. v. Darryl D. Berry, et al., No. 20-21801, S.D. Fla., 2020 U.S. Dist. LEXIS 233700).

  • December 17, 2020

    Ohio Federal Judge Won’t Dismiss Suit Against Franchisee Over Noncompete Agreement

    CLEVELAND — An Ohio federal judge on Dec. 14 upheld claims against a Tennessee-based franchisee brought by a franchisor alleging that a former executive violated his noncompete agreement by going to work for a Tennessee company related to the franchisee.  However, the judge dismissed the claims against the related company for lack of personal jurisdiction.

  • December 17, 2020

    Franchisees Ask High Court To Decide Dispute Over Intent To Delegate Arbitrability Issues

    WASHINGTON, D.C. — Two commercial cleaning business franchisees asked the U.S. Supreme Court on Nov. 27 to resolve a circuit court split and decide whether a passing reference to a set of arbitration rules constitutes “clear and unmistakable” intent to delegate arbitrability issues to an arbitrator, rather than a court (Ericka Richardson, et al. v. Coverall North America Inc., et al., No. 20-763, U.S. Sup.).

  • December 17, 2020

    Government: Antitrust Law Misapplied In Burger King Suit Over Franchisee Hiring Ban

    ATLANTA — A lower court misapplied federal antitrust law in dismissing a proposed class complaint challenging an agreement between Burger King corporate and its franchisees not to recruit or hire each other’s employees, the federal government tells the 11th Circuit U.S. Court of Appeals in an amicus curiae brief filed Dec. 7.  The brief follows an appellant brief filed by Burger King franchise employees who maintain that the agreement led to depressed workers’ wages.

  • December 10, 2020

    Judge: Suit Against Former Maryland Franchise Can Proceed In Tennessee

    MEMPHIS, Tenn. — A Tennessee-based franchisor’s lawsuit against the owners of a former franchise in Maryland who are accused of continuing to use trademarks, trade secrets and proprietary information after the termination of a franchising agreement can proceed in federal court in Tennessee, a federal judge ruled Nov. 23, finding that the defendants waived their personal jurisdiction defense because they agreed to the entry of a permanent injunction and because the franchise agreement includes a forum-selection clause (Gus’s Franchisor LLC v. Terrapin Restaurant Partners LLC, et al., No. 20-2372, W.D. Tenn., 2020 U.S. Dist. LEXIS 219040).

  • December 10, 2020

    9th Circuit Denies Franchisor’s Rehearing Request In Misclassification Suit

    PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel on Dec. 1 denied a petition for rehearing or rehearing en banc filed by a franchisor after a split panel in an Oct. 21 memorandum overturned a trial court’s denial of a franchisee’s motion to reopen his class action suit against a franchisor over his alleged misclassification, holding that the judge should reconsider the decision and apply the ruling in Henson v. Fidelity National Financial Inc. (Sergio Gonzalez, et al. v. Coverall North America Inc., No. 19-55511, 9th Cir., 2020 U.S. App. LEXIS 37526).

  • December 08, 2020

    Burger King Employees Ask 11th Circuit To Revive Suit Over Franchisee Hiring Ban

    ATLANTA — An agreement between Burger King corporate and its franchisees not to recruit or hire each other’s employees led to depressed workers’ wages, three employees argue to the 11th Circuit U.S. Court of Appeals in a Nov. 30 brief, seeking to reverse a lower court’s dismissal of a proposed class complaint (Jarvis Arrington, et al. v. Burger King Worldwide, Inc., et al., No. 20-13561, 11th Cir.).

  • December 07, 2020

    Federal Judge Explains Partial Judgment For 7-Eleven At 1st Circuit’s Request

    BOSTON — At the request of the First Circuit U.S. Court of Appeals, a federal judge in Massachusetts followed up his entry of partial judgment in favor of 7-Eleven Inc. with a memorandum and order on Dec. 2, explaining there is little overlap between the issues disposed of and those that remain pending in four franchise workers’ action over their alleged misclassification as contractors (Dhananjay Patel, et al. v. 7-Eleven Inc., No. 17-11414, D. Mass., 2020 U.S. Dist. LEXIS 225628).

  • December 04, 2020

    Missouri Federal Judge Stays Franchise Trademark Dispute Pending State Court Ruling

    ST. LOUIS — In a dispute over two franchises’ unauthorized use of a window distributor’s trademarks, a Missouri federal judge on Nov. 30 stayed the litigation pending a ruling on the scope of the company’s trademark license by a North Carolina state court.  However, the judge agreed to dismiss false advertising and trademark dilution claims, as well as claims against a franchise employee (Window World International LLC, et al. v. Jill O’Toole, et al., No. 4:19-2363, E.D. Mo., 2020 U.S. Dist. LEXIS 223071).

  • December 03, 2020

    Washington Court:  Former Car Dealership Owners Not Entitled To Settlement Funds

    TACOMA, Wash. — Previous owners of a Volkswagen dealership were not entitled to payments from a class action settlement over the company’s emissions violations under the terms of the parties’ purchase and sales agreement, a Washington appeals court held Nov. 24, affirming a trial court ruling (Rodney R. Parr, et al. v. Haselwood Imports Inc., No. 53640-4-II, Wash. App., Div. 2, 2020 Wash. App. LEXIS 3085).

  • December 03, 2020

    Domino’s Franchisee Worker Asks U.S. High Court To Consider Arbitration Question

    WASHINGTON, D.C. — In a Nov. 16 petition for a writ of certiorari, an employee of a Domino’s franchisee asks the U.S. Supreme Court to take up his appeal and rule 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 (Derek Piersing, et al. v. Domino’s Pizza Franchising LLC, et al., No. 20-695, U.S. Sup.).

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