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Mealey's Franchise

  • August 16, 2019

    2nd Circuit Finds Valid Arbitration Agreement Between Applicant, Franchisor

    NEW YORK — A franchisee application that contained an arbitration agreement and the franchisor’s consideration of that application constituted “sufficient consideration to support the agreement to arbitrate,” a Second Circuit U.S. Court of Appeals panel ruled Aug. 14, vacating a trial court’s opposite conclusion in the franchisee’s racial bias lawsuit (Doctor’s Associates, Inc. v. Girum Alemayehu, No. 18-1865, 2nd Cir., 2019 U.S. App. LEXIS 24151).

  • August 15, 2019

    Judge Denies Reconsideration Of Ruling On Property Forfeiture Relief For Subway Franchisor

    SAN JUAN, Puerto Rico — Refusing to reconsider a denial of relief from forfeiture after a Subway restaurant franchisee pleaded guilty to 13 counts of bank fraud, a federal judge in Puerto Rico on Aug. 7 held that a franchisor and sublessor’s motion relies on irrelevant facts and misconstrues the property subject to forfeiture (United States v. Felix Peña-Fernández v. Doctor’s Associates LLC, et al., No. 18-426, D. Puerto Rico, 2019 U.S. Dist. LEXIS 134489).

  • August 14, 2019

    8th Circuit:  Adult Toy Franchisee Has No Free Speech Claim In Zoning Dispute

    ST. LOUIS — An adult toy franchisee barred from opening in its chosen location in Jonesboro, Ark., due to its proximity to places of worship and day cares failed to show that the Arkansas law controlling its business location violated the First Amendment to the U.S. Constitution, was unconstitutionally vague or violated equal protection, an Eighth Circuit U.S. Court of Appeals panel ruled Aug. 12 (Adam and Eve Jonesboro, LLC v. Harold Perrin, et al., No. 18-2818, 8th Cir., 2019 U.S. App. LEXIS 23946).

  • August 13, 2019

    Panel:  No ‘Meeting Of The Minds’ On Arbitration In Franchise Row

    SAN FRANCISCO — A California federal judge did not err in refusing to compel arbitration of claims by franchisees that their franchisor improperly terminated two franchise license agreements (FLAs), a divided Ninth Circuit U.S. Court of Appeals ruled in an Aug. 7 unpublished opinion (Brian K. Nygaard, et al. v. Property Damage Appraisers Inc., No. 18-15055, 9th Cir., 2019 U.S. App. LEXIS 23586).

  • August 9, 2019

    Dismissal Denied, Amended Complaint Mostly Allowed In Assault Suit Against Wendy’s

    GREENBELT, Md. — Motions by Wendy’s International LLC, its affiliate and one of its franchisees to partially dismiss a lawsuit brought by a former fast food worker who claims that she was sexually assaulted on the job were denied by a federal judge in Maryland on July 19 in an opinion in which the judge also permitted the plaintiff to file an amended complaint (Jalyha Kyles v. Wendy’s International, LLC, et al., No. 8:18-cv-02822, D. Md., 2019 U.S. Dist. LEXIS 120431).

  • August 8, 2019

    Interlocutory Appeal Denied In Suit Over Jimmy John’s No-Hire Contracts

    CHICAGO — A federal judge in Illinois on Aug. 6 rejected a sandwich shop franchisor’s motion for interlocutory appeal of a dismissal denial in a putative Sherman Act class suit over no-hire contracts with franchisees, noting that bringing the matter before an appellate court as discovery is concluding would be “premature” (Donald Conrad, et al. v. Jimmy John’s Franchise, LLC, et al., No. 18-133, S.D. Ill.).

  • August 7, 2019

    Judge Dismisses Incentive Program Violation Case Against Mazda Motor

    TRENTON, N.J. — Because a trade association’s interests are not germane to franchised car dealers it seeks to represent, a federal judge in New Jersey on July 30 dismissed the association’s lawsuit against Mazda Motor of America Inc. alleging that an incentive program violates the New Jersey Franchise Practices Act (NJFPA) (New Jersey Coalition of Automotive Retailers Inc. v. Mazda Motor of America Inc., No. 18-14563, D. N.J., 2019 U.S. Dist. LEXIS 126332).

  • August 5, 2019

    H&R Block Seeks Arbitration Ruling From 8th Circuit In Employee’s Class Suit

    ST. LOUIS — Franchisors H&R Block Inc. and H&R Block Tax Services LLC (collectively, H&R Block) filed an appellant brief on July 31 in the Eighth Circuit U.S. Court of Appeals seeking reversal of a trial court’s denial of a motion to compel arbitration in a branch manager’s Sherman Act class complaint (Melissa Ramsey, et al. v. H&R Block, Inc., et al., No. 19-2217, 8th Cir.).

  • August 5, 2019

    Counterclaims Against Best Western Dismissed, In Part, In Arizona

    PHOENIX — Best Western International Inc. on July 30 succeeded in its effort to obtain dismissal of allegations by a former franchisee that the hotel chain engaged in discrimination, when a federal judge in Arizona deemed the claim conclusory and inadequately supported (Best Western International Inc. v. Twin City Lodging LLC, No. 18-3374, D. Ariz., 2019 U.S. Dist. LEXIS 126487).

  • August 2, 2019

    High Court Asked To Review Maryland Ruling Imposing Taxes On Staples, Subsidiaries

    WASHINGTON, D.C. — Staples Inc. and Staples The Office Superstore Inc. on July 22 filed a petition for certiorari asking the U.S. Supreme Court to clarify whether a state may treat franchise fees, royalty fees and similar payments from in-state businesses to out-of-state businesses as income earned in that state by the out-of-state business (Staples, Inc., et al. v. Maryland Comptroller of the Treasury, No. 19-119, U.S. Sup.).

  • August 1, 2019

    Sherman Act Suit Over Little Caesar’s No-Poach Clause Tossed With Prejudice

    DETROIT — A former pizza franchisee manager who sued the franchisor over its no-poach agreement under the Sherman Act failed to make “a serious effort to state a case under a rule-of-reason antitrust theory,” a federal judge in Michigan ruled July 29, dismissing the case with prejudice (Christopher Ogden v. Little Caesar Enterprises, Inc., et al., No. 18-12792, E.D. Mich., 2019 U.S. Dist. LEXIS 126248).

  • August 1, 2019

    Injunctive Relief Class Added To Proposed Motel 6 Guest List Turnover Settlement

    PHOENIX — An amended settlement agreement and proposed order were filed July 31 in an Arizona class lawsuit over 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, adding an injunctive relief class to the settlement that totals up to $10 million (Jane V., et al. v. Motel 6 Operating L.P., et al., No. 18-242, D. Ariz.).

  • July 31, 2019

    Panera Franchisee Agrees To Pay Up To $4.6M To End Wage Collective, Class Claims

    YOUNGSTOWN, Ohio — A settlement proposal under which an Ohio-based Panera Bread franchisee will pay up to $4,625,000 to end collective and class wage claims brought by assistant managers was granted preliminary approval by a federal judge in Ohio on July 26 (Erin Kis, et al. v. Covelli Enterprises, Inc., Nos. 18-54 and 18-434, N.D. Ohio, 2019 U.S. Dist. LEXIS 125005).

  • July 30, 2019

    11th Circuit Affirms Ruling That Safe Sales Faxes Were Solicited By Hotels

    ATLANTA — A trial court correctly ruled that opt-out notices required by the Telephone Consumer Protection Act as amended by the Junk Fax Prevention Act (TCPA) were not necessary on sales faxes for hotel safes sent to hotel franchisees as the faxes were solicited and the Federal Communications Commission (FCC) eliminated its solicited-fax rule while the appeal was pending, an 11th Circuit U.S. Court of Appeals panel ruled July 26, affirming a trial court’s summary judgment ruling in a lawsuit that was filed as a class action (Gorss Motels, Inc., et al. v. Safemark Systems, LP, Nos. 18-12511 & 18-15232, 11th Cir., 2019 U.S. App. LEXIS 22352).

  • July 30, 2019

    Suit Against Franchisor Dismissed; Kingdom Of Jordan Is Proper Venue

    ST. LOUIS. — A Missouri federal judge on July 26 granted a motion to dismiss filed by a franchisor and its parent corporation after determining that the Hashemite Kingdom of Jordan is the proper forum for the plaintiffs to pursue their claims arising out of the wrongful death of their 6-year-old son at a Hardee’s Restaurant in Amman, Jordan (Ahmad Hersh v. CKE Restaurants Holdings Inc., et al., No. 17-2043, E.D. Mo., 2019 U.S. Dist. LEXIS 125265).

  • July 30, 2019

    California Man Alleges Restaurant Has No Accessible Tables In Violation Of ADA

    RIVERSIDE, Calif. — A quadriplegic man who uses a wheelchair alleges in a July 21 federal complaint that a California pretzel franchise does not have accessible dining tables in violation of the Americans with Disabilities Act (ADA) (Brian Whitaker v. AP Franchise Group, LLC, et al., No. 5:19-cv-01334, C.D. Calif.).

  • July 30, 2019

    6th Circuit Vacates Order That Cleared IHOP Of Paying Legal Fees Of Ex-Employee

    CINCINNATI — Saying disputes of material issues of fact must go to a jury, a Sixth Circuit U.S. Court of Appeals panel in a June 25 unpublished opinion vacated and remanded a lower court’s summary judgment order that a former International House of Pancakes LLC employee was not entitled to indemnity for $130,000 in legal fees she spent defending herself in a criminal case (Autumn Lee Tangas v. International House of Pancakes LLC, et al., No. 18-3217, 6th Cir., 2019 U.S. App. LEXIS 18859).

  • July 26, 2019

    Florida Federal Judge Grants Preliminary Injunction Sought By Tax Service Company

    FORT LAUDERDALE, Fla. — A federal judge in Florida on July 18 adopted a magistrate judge’s report and recommendation to grant a tax service franchisor’s motion for a preliminary injunction in its lawsuit alleging that a franchisee improperly used franchise marks to lure customers but processed tax returns through a different tax preparation business operating at the same location as the franchise (JTH Tax, Inc., et al. v. Jesus Abikarram, et al., No. 19-60328, S.D. Fla., 2019 U.S. Dist. LEXIS 121685).

  • July 25, 2019

    9th Circuit Panel Orders Rehearing In Franchise Wage-And-Hour Case

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on July 22 withdrew its May  holding that a franchisor violated wage-and-hour laws by misclassifying franchisees as independent contractors, granted the franchisor’s request for a panel rehearing and said it would offer a revised disposition and issue an order certifying to the California Supreme Court the question of whether a 2018 high court ruling applies retroactively (Gerardo Vazquez, et al. v. Jan-Pro Franchising International, Inc., No. 17-16096, 9th Cir., 2019 U.S. App. LEXIS 21687).

  • July 22, 2019

    Franchisees Tell Panel To Deny Rehearing In Wage-And-Hour Case

    SAN FRANCISCO — In a June 26 response brief, a group of franchisees urges the Ninth Circuit U.S. Court of Appeals to turn away a request for rehearing or rehearing en banc by a franchisor the panel in May 2019 found violated wage-and-hour laws by misclassifying the franchisees as independent contractors (Gerardo Vazquez, et al. v. Jan-Pro Franchising International, Inc., No. 17-16096, 9th Cir.).