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Mealey's Franchise

  • February 21, 2020

    Judge Approves Settlement In Employee’s Lawsuit Against Pizza Hut Owner

    JACKSON, Miss. — A Mississippi federal judge on Feb. 14 approved a settlement for $5,000 in an employee’s lawsuit against the owner of a Pizza Hut franchise and the owner and manager of an apartment complex where the employee suffered injuries from an assault by a third party while delivering pizza (Jemuel Gates v. YUM! Brands, Inc., et al., No. 19-830, S.D. Miss.).

  • February 21, 2020

    Panel: Franchisee’s Case Falls Under Mandate Of Forum-Selection Clauses

    RALEIGH, N.C. — A trial court erred in denying a motion to dismiss or transfer a franchisee’s declaratory judgment against the franchisor of smoothies stores over an alleged breach of a multiunit agreement and assignment agreement, the North Carolina Court of Appeals held Feb. 4, because the agreements contain mandatory forum-selection clauses (S&S Family Business Corp., et al. v. Clean Juice Franchising, LLC, No. COA19-264, N.C. App., 2020 N.C. App. LEXIS 128).

  • February 21, 2020

    Federal Judge Dismisses In Part Claims Against Laser Tag Facilities Franchisor

    MILWAUKEE — A Wisconsin federal judge on Feb. 13 granted in part a motion to dismiss and dismissed common-law misrepresentation claims against a franchisor of laser tag facilities, its affiliate and their owners under the economic loss doctrine (Steven Falk, et al. v. Joseph N. Wheeler Jr., et al., No. 19-1168, E.D. Wis., 2020 U.S. Dist. LEXIS 26575).

  • February 21, 2020

    No Triable Issues Exist On Washington Consumer Protection Act Claim, Judge Says

    SEATTLE — No triable issues remain as to a restaurant operation business’s Washington Consumer Protection Act (CPA) claim over use of a “Bok Bok” mark, a Washington federal judge held Feb. 14, citing an order granting summary judgment to the business on its Lanham Act claims and granting in part its request for a permanent injunction (BBC Group NV LLC v. Island Life Restaurant Group LLC, et al., No. 18-1011, W.D. Wash., 2020 U.S. Dist. LEXIS 26317).

  • February 21, 2020

    7-Eleven Franchisees May Proceed With Claims Over Unpaid Reimbursements

    LOS ANGELES — A federal judge in California on Feb. 19 granted summary judgment to franchisor 7-Eleven Inc. on unpaid overtime claims brought by franchisees on behalf of themselves and a class, finding that the franchisees failed to provide sufficient evidence; however, the judge permitted the franchisees to proceed with their claims seeking unpaid reimbursements (Serge Haitayan, et al. v. 7-Eleven, Inc., No. 17-7454, C.D. Calif.).

  • February 20, 2020

    Convenience Store Operators’ Federal Wage Claim Survives Judgment On Pleadings Motion

    GREENSBORO, N.C. — A federal judge in North Carolina on Feb. 18 partially granted a motion for partial judgment on the pleadings filed by a convenience store franchisor and the landlord for a North Carolina location but allowed the franchisees, who allege that they were misclassified and were really employees, to proceed with their federal claim seeking unpaid overtime along with a claim for national origin discrimination (Amro Elsayed, et al. v. Family Fare LLC, et al., No. 18-1045, M.D. N.C., 2020 U.S. Dist. LEXIS 27064).

  • February 20, 2020

    Motel 6 Guest List Settlement Granted Approval Over Attorney General’s Protests

    PHOENIX — A settlement agreement in an Arizona federal class lawsuit over motel guest lists being voluntarily turned over to U.S. Immigration and Customs Enforcement (ICE) agents by Motel 6 Operating L.P. and G6 Hospitality LLC, doing business as Motel 6, that provides up to $10 million was granted final approval on Feb. 18 over protests by the Arizona attorney general who argued in a Feb. 6 amicus brief that the settlement provided the majority of the settlement funds to cy pres recipients (Jane V., et al. v. Motel 6 Operating L.P., et al., No. 18-242, D. Ariz.).

  • February 18, 2020

    JPMDL Denies Centralization Of Sex Trafficking Cases Against Hotel Franchises

    WASHINGTON, D.C. — The Judicial Panel on Multidistrict Litigation (JPMDL) on Feb. 5 refused to consolidate and centralize 21 lawsuits brought by sex trafficking victims against a number of different hotel owners, franchisors and franchisees under the Trafficking Victims Protection Reauthorization Act of 2008 (TVPRA), finding that unique issues regarding each plaintiff’s allegations predominate and that there is no common defendant across all of the lawsuits (In re:  Hotel Industry Sex Trafficking Litigation, MDL 2928, JPMDL, 2020 U.S. Dist. LEXIS 19882).

  • February 14, 2020

    Judge Issues Permanent Injunction To Franchisees For Breach Of Contract

    CHICAGO — In-home care franchisees breached their franchise agreements, a federal judge in Illinois held Feb. 11, rejecting the franchisees’ fraudulent inducement defense and entering a permanent injunction preventing them from operating their business (BrightStar Franchising LLC v. Northern Nevada Care, Inc., et al., No. 17-9213, N.D. Ill., 2020 U.S. Dist. LEXIS 23209).

  • February 13, 2020

    9th Circuit Disagrees With Dismissal Of Frozen Yogurt Restaurant Franchisee’s Case

    SAN FRANCISCO — A court’s dismissal of a breach of contract lawsuit as sanction for a frozen yogurt restaurant franchisee’s local rules violations was “an abuse of discretion,” the Ninth Circuit U.S. Court of Appeals held Feb. 7, reversing and remanding for consideration of the merits of motions to dismiss (Cantran Group, Inc. v. CUPS, LLC, et al., No. 18-56545, 9th Cir.).

  • February 12, 2020

    Judge Reverses Decision On Ostensible Agency Theory As To Employers In Wages Case

    FRESNO, Calif. — In reconsidering an order based on new controlling authority from the Ninth Circuit U.S. Court of Appeals, a California federal judge on Jan. 31 granted summary judgment to former employers of home cleaners on the ostensible agency theory of liability in a wages dispute (Angela Cruz, et al. v. MM 879 Inc., et al., No. 15-01563, E.D. Calif., 2020 U.S. Dist. LEXIS 16333).

  • February 12, 2020

    Panel: Franchisor Failed To Terminate Agreement Before Franchisee’s Bankruptcy

    CINCINNATI — A franchise agreement had not been successfully terminated before a franchisee’s bankruptcy, the Sixth Circuit U.S. Court of Appeals Bankruptcy Appellate Panel (BAP) held Jan. 28, affirming denial of a franchisor’s motion to dismiss the franchisee’s bankruptcy case (Rockne’s, Inc. v. Dan Mazzola, Inc. [In re:  Dan Mazzola, Inc.]), No. 19-8007, 6th Cir. BAP, 2020 Bankr. LEXIS 238).

  • February 11, 2020

    Judge:  7-Eleven Franchisee Cannot Sue Under Illinois Consumer Fraud Act

    CHICAGO — A franchisee and its shareholder cannot sue 7-Eleven Corp. under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), a federal judge in Illinois held Feb. 6, granting 7-Eleven’s motion to dismiss an amended complaint and dismissing the case (Rehan S. Hashmi, et al. v. 7-Eleven, Inc., No. 19-4090, N.D. Ill., 2020 U.S. Dist. LEXIS 20129).

  • February 11, 2020

    Hotel Franchisor Awarded Summary Judgment In Unpaid Overtime Class Action

    PHILADELPHIA — A hotel franchisor was awarded summary judgment by a federal judge in Pennsylvania on Feb. 6 in a suit brought by a former housekeeper accusing it of failing to pay overtime wages in violation of the Fair Labor Standards Act (FLSA) and Pennsylvania Minimum Wage Act (PWMA), ruling that it could not be found liable as a joint employer because a franchise agreement did not give the franchisor any power over the employment policies (Gina DiFlavis v. Choice Hotels International Inc., et al., No. 18-3914, E.D. Pa., 2020 U.S. Dist. LEXIS 20801).

  • February 06, 2020

    Ohio High Court Denies Review Over Franchisor BOPA Violation Ruling

    COLUMBUS, Ohio — The Ohio Supreme Court on Feb. 4 denied review of a finding that 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 (Burger Dynasty, Inc. v. Bar 145 Franchising, LLC, et al., No. 2019-1565, Ohio Sup., 2020 Ohio LEXIS 315).

  • February 04, 2020

    Judge Temporary Enjoins Franchisor On Arbitrating Distributorship Agreements

    SAN DIEGO — A California federal judge on Jan. 31 issued a temporary restraining order (TRO) to three individuals who signed franchise distributorship agreements with Matco Tools Corp. in their dispute seeking to enjoin Matco from arbitrating in Ohio per a clause in the agreements (Emanuel Aguilera, et al. v. Matco Tools Corp., No. 19-01576, S.D. Calif., 2020 U.S. Dist. LEXIS 16457).

  • February 03, 2020

    Judge Awards $373,417.34 Default Judgment To Tax Prep Franchisor

    NEWARK, N.J. — A federal judge in New Jersey on Jan. 27 granted a default judgment of $373,417.34 in favor of Jackson Hewitt Inc., a franchisor of tax preparation services, in its breach of contract against a guarantor of a franchise agreement for failure to remit certain fees (Jackson Hewitt Inc. v. Juan Jose Flores, No. 19-9210, D. N.J., 2020 U.S. Dist. LEXIS 14928).

  • January 30, 2020

    Judge Dismisses Subway Franchisor From Deaf Man’s Discrimination Case

    NEW YORK — A federal judge in New York on Jan. 17 dismissed the franchisor of Subway restaurant from a deaf man’s discrimination lawsuit because there are no allegations that the franchisor was the operator of the restaurant where the incident occurred (Phillip Sullivan, Jr. v. Doctor’s Associates LLC, et al., No. 19-719, S.D. N.Y., 2020 U.S. Dist. LEXIS 11562).

  • January 30, 2020

    Transfer Granted In Class Suit Over Franchisee’s Fingerprint Scan Requirements

    CHICAGO — A U.S. District Court for the Northern District of Illinois judge on Jan. 29 agreed to transfer a putative class complaint over a franchisee’s alleged use and retention of employees’ fingerprint scans, but transferred the case to the Central District of Illinois, not a federal court in Indiana as the franchisee had requested (Tiffanie Snider, et al. v. Heartland Beef, Inc., No. 19-7386, N.D. Ill., 2020 U.S. Dist. LEXIS 14502).

  • January 28, 2020

    Renewed Preliminary Injunction In Franchiser’s Trade Secret Dispute Granted

    YOUNGSTOWN, Ohio — A federal judge in Ohio on Jan. 27 granted a franchisor’s emergency renewed motion for preliminary injunction against franchisees who allegedly violated the terms of a franchise agreement and misappropriated the franchisor’s trade secrets when they opened a competing business, holding that the franchisor has sufficiently shown that all four factors considered in granting such relief have been met (Handel’s Enterprises Inc. v. Kenneth S. Schulenburg, et al., No. 18-508, N.D. Ohio, 2020 U.S. Dist. LEXIS 1185).