Mealey's Franchise

  • March 16, 2018

    Parent Corporations Could Potentially Be Found To Be Employers, Federal Judge Says

    CAMDEN, N.J. — A New Jersey federal judge on March 13 rejected parent corporations’ argument that a plaintiff has alleged a retaliation claim only against their subsidiary, finding that the parent corporations could potentially be found to be her employers under Third Circuit precedent (Stephanie Cunningham v. Executive Care of Cherry Hill, et al., No. 17-2261, D. N.J., 2018 U.S. Dist. LEXIS 41967).

  • March 12, 2018

    Georgia Panel Reverses Grant Of Interlocutory Injunction In Franchise Dispute

    ATLANTA — A Georgia appeals panel on March 8 held that a lower court erred in finding that a car dealership franchisor exercising its right of first refusal (ROFR) is required to show that its actions are not arbitrary and that the proposed transferee is unfit or unqualified, reversing and remanding the lower court’s grant of an interlocutory injunction against the franchisor (Nissan North America, Inc. v. Walker-Jones Nissan, LLC, No. A17A2018, Ga. App., 5th Div., 2018 Ga. App. LEXIS 171).

  • March 9, 2018

    Wholesaler Says Pabst Brewing Provided No Cause For Termination Of Agreement

    BALTIMORE — A beer distributor says in a Feb. 16 motion for summary judgment filed in Maryland state court that there is no dispute that Pabst Brewing Co. LLC violated the Beer Franchise Fair Dealing Act (BFFDA) when terminating a distribution agreement without cause (Frederick P. Winner Ltd. v. Pabst Brewing Co. LLC, No. 03-CV-15-004824, Md. Cir., Baltimore Co.).

  • March 9, 2018

    Jimmy John’s Consolidated Wage Suit Doesn’t Bar Separate Suit Against Franchisee

    EL PASO, Texas — A Texas federal judge on March 1 declined to dismiss or transfer a wage collective action against a Jimmy John’s franchisee, finding that the lead plaintiff’s participation in a separate consolidated collective action bringing similar claims against various Jimmy John’s corporate entities did not bar his claims against the franchisee (Eric Hart v. Donostia LLC, No. 17-134, W.D. Texas, 2018 U.S. Dist. LEXIS 35503).

  • March 8, 2018

    Judge Grants Injunction Enforcing Franchise Agreements’ Noncompete Provisions

    LINCOLN, Neb. — A Nebraska federal judge on March 6 granted a franchisor’s motion for preliminary injunction seeking to enforce covenants not to compete contained in franchise agreements for two of its nutritional supplement retail stores (Complete Nutrition Franchising, LLC, et al. v. J. Howell, LLC, et al., No. 17-3170, D. Neb., 2018 U.S. Dist. LEXIS 36283).

  • March 7, 2018

    Federal Judge Orders New Trial On Compensatory, Punitive Damages In Franchise Suit

    ABERDEEN, Miss.— A Mississippi federal judge on March 5 found that none of the evidence cited by a franchisee supports a jury’s $250,000 compensatory damages verdict in its favor in a dispute with a franchisor, ordering a new trial on the issue of compensatory and punitive damages (Kaiva, LLC v. Michael Parker, et al., No. 15-63, N.D. Miss., 2018 U.S. Dist. LEXIS 35036).

  • March 2, 2018

    Federal Judge Awards Franchisor Unjust Enrichment, Breach Of Contract Damages

    MIAMI — Ruling on dueling summary judgment motions in a breach of contract, trademark infringement and unfair competition action between a franchisor and a franchisee, a Florida federal judge on Feb. 28 awarded the franchisor profits, any damages it sustained and the costs of the lawsuit and $10,275.36 for breach of contract (Peterbrooke Franchising of America, LLC v. Miami Chocolates, LLC, et al., No. 16-20417, S.D. Fla., 2018 U.S. Dist. LEXIS 31977).

  • March 1, 2018

    Judge Dismisses Fraudulent Concealment And Inducement Claims Against Franchisor

    MIAMI — A Florida federal judge on Feb. 27 granted a motor vehicle manufacturer’s motion to dismiss with prejudice a motor vehicle dealership’s lawsuit alleging fraudulent concealment, fraudulent inducement and unfair and deceptive trade practices (Broward Motorsports of Palm Beach, LLC v. Polaris Sales, Inc., No. 17-81100, S.D. Fla., 2018 U.S. Dist. LEXIS 31376).

  • March 1, 2018

    Judge Partly Grants Motion For Preliminary Injunction In Franchise Dispute

    BEAUFORT, N.C. — A North Carolina judge on Feb. 21 granted in part a franchisor’s motion for a preliminary injunction in its dispute with a longtime franchisee, finding that the issuance of the injunction is necessary to protect the franchisor’s rights during the lawsuit (Window Gang Ventures, Corp. v. Gabriel Salinas, et al., No. 18 CVS 107, N.C. Super., Carteret Co., 2018 NCBC LEXIS 18).

  • February 28, 2018

    Franchisees’ Antitrust Claims Against GNC Survive Motion To Dismiss

    PITTSBURGH — Franchisees who brought counterclaims against General Nutrition Corp. (GNC) for various antitrust violations have pleaded sufficient facts to survive a motion for dismissal, a Pennsylvania federal judge ruled Feb. 26 (General Nutrition Corporation v. Choudhry S. Javaid, et al., No. 17-1074, W.D. Pa., 2018 U.S. Dist. LEXIS 30154).

  • February 27, 2018

    Labor Board Vacates Recent Hy-Brand Joint-Employer Decision

    WASHINGTON, D.C. — The National Labor Relations Board (NLRB) on Feb. 26 issued a one-page order vacating its decision on Dec. 14, 2017, in which the split labor board overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015), and reinstated the joint-employer standard in place before that decision, finding that one NLRB member should have been disqualified from participating in the decision making (Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., et al., Nos. 25–CA–163189, 25–CA–163208, 25–CA–163297, 25–CA–163317, 25–CA–163373, 25–CA–163376, 25–CA–163398, 25–CA–163414, 25–CA–164941, and 25–CA–164945, NLRB).

  • February 26, 2018

    Franchisor Tells 5th Circuit To Affirm Ruling Finding It Complied With Agreement

    NEW ORLEANS— A commercial cleaning franchisor told the Fifth Circuit U.S. Court of Appeals on Jan 26 that it should uphold a federal judge in Texas’ ruling awarding it summary judgment, contending that it presented sufficient evidence to show that a region franchise in Great Britain breached the terms of their agreement after failing to pay required fees (Jani-King Franchising Inc. v. Jani-King [GB] Ltd., et al., No. 3:13-cv-0413, 5th Cir.).

  • February 26, 2018

    South Dakota High Court Orders New Trial On Lost Profits Damages In Fuel Dispute

    PIERRE, S.D. — The South Dakota Supreme Court on Feb. 14, in its second consideration of the same case, ruled that the trial court erred in its jury instructions on consequential damages and the foreseeability of a fuel supplier’s lost profits to a convenience store owner and ordered a new trial on damages for lost profits (Stern Oil Company, Inc. v. James V. Brown, et al., No. 27937, S.D. Sup., 2018 S.D. 15).

  • February 23, 2018

    Restaurant ‘Adequately Alleges’ Infringement Threat In Franchise Case, Judge Says

    SAN JOSE, Calif. —A federal judge in California on Feb. 20 denied a motion to dismiss a franchise dispute involving two restaurants because the plaintiffs’ amended complaint “adequately alleges” a threat of imminent use of a trademark that would constitute infringement (Jgx Inc. v. Jon Handlery, et al., No. 17-cv-00287-BLF, N.D. Calif.; 2018 U.S. Dist. LEXIS 27079).

  • February 23, 2018

    Federal Judge Says No Fraudulent Joinder, Bad Faith, Remands Franchise Suit

    MOBILE, Ala. — A federal judge in Alabama on Feb. 21 remanded a Dunkin’ Donuts franchise suit to state court, finding that the franchisor did not prove that it had a bad faith claim and, therefore, that removal was not timely (McAdam Properties LLC v. Dunkin’ Donuts Franchising LLC, et al., No. 2:17-CV-2088-VEH, S.D. Ala., 2018 U.S. Dist. LEXIS 27510).

  • February 23, 2018

    Consumer Sufficiently Alleges Direct Fraud Against Tax Prep Franchisor, Subsidiary

    LOS ANGELES — A California federal judge on Feb. 20 held that a consumer who claims that a tax preparation company, its franchisee and other entities manipulated tax returns and submitted them to the Internal Revenue Service without tax payers' consent has sufficiently alleged a theory of direct fraud by the franchisor and its subsidiary (Luis Lomeli v. Jackson Hewitt, Inc., et al., No 17-02899, C.D. Calif., 2018 U.S. Dist. LEXIS 27087).

  • February 21, 2018

    Partial Summary Judgment Ruling For Silent Partner Cut Out Of Franchisor Ownership

    NEW YORK — The formation of a new company to cut out a partial owner of a franchisor who operated only as a passive investor constituted breach of fiduciary duty, a New York state judge ruled Feb. 13, granting partial summary judgment for the silent partner and directing the parties to continue settlement discussions (John Stavroulakis v. Euripides Pelakanos, et al., No. 653478/2015, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 429).

  • February 21, 2018

    Judge Enjoins Man From Operating Tax Business For Breaching Agreements

    KANSAS CITY, Mo. — A man accused of violating his franchise lease agreements (FLAs) with H&R Block Tax Services LLC was barred by a federal judge in Missouri Feb. 16 from soliciting or conducting any work within 25 miles of the franchise territories that is similar to H&R Block and ordered to cease operation of a tax preparation business in West Haven, Conn., until September 2019 (H&R Block Tax Services LLC v. Juan Frias, No. 18-00053-CV-RK, W.D. Mo., 2018 U.S. Dist. LEXIS 25667).

  • February 16, 2018

    Montana High Court Finds No Good Cause For 2nd Chrysler-Jeep Franchise

    HELENA, Mont. — A trial court judge did not err in affirming a decision from the Montana Department of Justice, Motor Vehicle Division, that barred the Chrysler Group LLC (New Chrysler) from opening a second Chrysler-Jeep franchise in the town of Billings, a panel of the Montana Supreme Court ruled Feb. 13, holding that the franchisor failed to establish good cause under the Montana Dealer Act (Rimrock Chrysler Inc., et al. v. State of Montana Department of Justice, Motor Vehicle Division, et al., No. 17-0284, Mont. Sup., 2018 Mont. LEXIS 28).

  • February 16, 2018

    Bankruptcy Judge: Cases ‘Not Filed In Good Faith’; Franchise Agreement Stands

    WILMINGTON, Del. — A federal bankruptcy judge in Delaware on Feb. 13 granted a motion to dismiss a Chapter 11 bankruptcy proceeding filed by a creditor, concluding that the bankruptcies of two management companies “were not filed in good faith” and the franchise agreement between the companies and a creditor could not be rejected (In re:  Rent-A-Wreck of America Inc., No. 11592, Ch. 11, Del Bkcy., 2018 Bankr. LEXIS 406).