Newsletter RSS

Mealey's Franchise

  • October 15, 2020

    Restaurant, Hospitality Franchise Owners File $41M Coronavirus Coverage Lawsuit

    NEWARK, N.J. — The owners of more than 120 franchise locations under the brands Wendy's, T.G.I. Friday's, Marriott and Hilton on Oct. 12 sued their all-risk commercial business insurer in a federal court in New Jersey for breach of contract and reformation, alleging that physical loss and damage caused by the novel coronavirus “directly led” to their subsequent $40,798,390 in economic damages (Manhattan Partners LLC, et al. v. American Guaranty and Liability Insurance Company, No. 20-cv-14342, D. N.J.).

  • October 15, 2020

    Black Workers Accuse McDonald’s Of History Of Racial Discrimination

    ROCK ISLAND, Ill. — McDonald’s Corp. was hit with a complaint on Oct. 13 in an Illinois federal court by two former employees and a current employee accusing it of racial harassment and discrimination against Black employees and favoritism toward white employees (Selynda Middlebrook, et al. v. McDonald’s Corporation, et al., No. 20-4214, C.D. Ill.).

  • October 12, 2020

    Judge Gives Preliminary Approval Of $10M Settlement In Wage Putative Class Action

    SACRAMENTO, Calif. — A California federal judge on Oct. 7 granted preliminary approval of a $10 million settlement in a putative wage and hour class action against a staffing agency, one of its franchisees and a wine servicing company because an issue of commonality in the class had been resolved (Michael H. Stoddart, et al. v. Express Services, et al., No. 12-1054, E.D. Calif.).

  • October 07, 2020

    Judge Declines To Dismiss Antitrust Suit Against Real Estate Franchisors

    CHICAGO — An Illinois federal judge on Oct. 2 allowed an antitrust action against the National Association of Realtors (NAR) and seven real estate franchisors to proceed because homeowners sufficiently allege a conspiracy to artificially inflate commission offers to a successful buyer-broker for property listing on a multiple listing service (MLS) (Christopher Moehrl, et al. v. The National Association of Realtors, et al., No. 19-1610, N.D. Ill., 2020 U.S. Dist. LEXIS 182532).

  • October 05, 2020

    In Mixed Ruling, Minnesota Federal Judge Partly Sides With Franchisee

    MINNEAPOLIS — Allegations by a Denny's franchisee that its franchisor breached the Minnesota Franchise Act when it failed to renew a franchise agreement under "substantially similar" terms will proceed, according to a Sept. 30 opinion by a federal judge there (Rogers Family Foods LLC v. DFO LLC, No. 19-1476, D. Minn., 2020 U.S. Dist. LEXIS 180598).

  • October 05, 2020

    Judge Declines Preliminary Injunction Barring Sale Of 11 Popeyes Franchises

    NASHVILLE, Tenn. — A group of co-owners of 11 Popeyes Louisiana Kitchen Restaurants franchises failed to establish the need for a preliminary injunction enjoining another group of co-owners from selling the franchises, a Tennessee federal judge ruled Oct. 1, finding an unlikelihood of success on the merits of intentional misrepresentation and conversion claims (Rajendra Patel, et al. v. AR Group Tennessee, LLC, et al., No. 20-52, M.D. Tenn., 2020 U.S. Dist. LEXIS 182130).

  • October 02, 2020

    Dismissal Of Securities Class Action Over CEO's Alleged Sexual Misconduct Stands

    NEW YORK — A federal district court did not err in dismissing a pension plan's consolidated amended securities class action complaint against a tax preparation services provider and two of its former senior executives stemming from the company's former CEO's sexual and personal misconduct without leave to amend because the pension plan failed to plead any sufficient material misrepresentations in making its federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled Sept. 30 in a summary order (In re Liberty Tax Inc. Securities Litigation, No. 20-652, 2nd Cir.).

  • October 02, 2020

    Outback Steakhouse's Franchisee Sues Insurer For Losses Arising Out Of Coronavirus

    SAN FRANCISCO — The franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies on Sept. 29 sued an insurer in a California federal court, alleging that an all-risk insurance policy unambiguously provides coverage for its "direct and/or imminent physical loss" and property damage related to the novel coronavirus (Out West Restaurant Group Inc., et al. v.  Affiliated FM Insurance Company, No. 20-06786, N.D. Calif.).

  • October 01, 2020

    Judge Confirms Award On Post-Termination Rights To Bath Remodeling Franchisees

    WILMINGTON, Del. — A Delaware federal judge on Sept. 29 confirmed a final arbitration award to former franchisees on post-termination rights against the franchisor of residential bath remodeling services as a result of the franchisor's breaches of franchise agreements (Rome Enterprises, Inc., et al. v. ReBath, LLC, 19-MC-191, D. Del., 2020 U.S. Dist. LEXIS 179078).

  • September 30, 2020

    Krispy Kreme Franchisee Is Owed Refund For Increase In Unemployment Taxes

    AMARILLO, Texas — A Krispy Kreme franchisee is owed $286,889.56 by the Texas Workforce Commission (TWC) as a refund for an increase in unemployment taxes paid as the result of an improper transfer of a predecessor's unemployment compensation experience rating to the franchisee, a Texas appeals panel held Sept. 25 (Dulce Restaurants, LLC v. Texas Workforce Commission, No. 07-19-00213-CV, Texas App., 7th Dist., 2020 Tex. App. LEXIS 7781).

  • September 24, 2020

    Smoothie King Franchisee Pays Back Wages After Denying Emergency Leave

    MOBILE, Ala. — The operator of a Smoothie King franchise in Mobile paid $918 in back wages to seven employees denied emergency leave while being tested for COVID-19, caused by the novel coronavirus, or quarantining due to exposure at work, the U.S. Department of Labor (DOL) announced Sept. 21.

  • September 24, 2020

    EEOC Sues Subway Franchisee For Committing Bias With Job Denial

    INDIANAPOLIS — Ranrae Inc., a Subway franchisee in Indiana, violated the Americans with Disabilities Act (ADA) when it rejected a heard-of-hearing job applicant due to his hearing and speech impairments, the Equal Employment Opportunity Commission alleges in a Sept. 23 class complaint filed in a federal court in Indiana (Equal Employment Opportunity Commission v. Ranrae, Inc., No. 20-2450, S.D. Ind.).

  • September 23, 2020

    Judge:  Former Restoration Services Franchisee Breached Contract Post-Termination

    NASHVILLE, Tenn. — In a dispute over the termination of a franchise agreement, a franchisor of cleaning and damage restoration services was granted summary judgment in part on Sept. 21 by a Tennessee federal judge on the franchisor's breach of contract and trademark infringement claims as well as a breach of contract counterclaim brought by a former franchisee (Servpro Industries, Inc. v. Tammy Woloski, et al., No. 17-1433, M.D. Tenn., 2020 U.S. Dist. LEXIS 171955).

  • September 22, 2020

    Insurer: No Coverage Due For Suit Disputing McDonald's Collection Of Biometric Data

    CHICAGO — A businessowners liability insurer filed suit in a federal court in Illinois on Sept. 21, seeking a declaration that it owes no coverage for an underlying class action alleging that a McDonald's franchise owner violated the Illinois Biometric Information Privacy Act (BIPA) when it scanned an employee's fingerprints but did not disclose the specific purpose for collecting, storing and using her biometric data (American Family Mutual Insurance Company v. McEssy Investment Company, et al., No. 20-05591, N.D. Ill., Eastern Div.).

  • September 20, 2020

    Insurers Seek To Boot Claims In Franchiser's Insurance Bad Faith Suit

    DENVER — Dismissal of an insured's lawsuit against its commercial property insurance provider and the provider's parent company seeking coverage for business income losses at its franchised hair salons in Colorado and Missouri stemming from state and local governmental orders in response to the novel coronavirus pandemic is warranted because the insured has failed to state any viable claim against the defendants under the plain language of the policy, the defendants argue in a Sept. 11 motion to dismiss filed in Colorado federal court (Holtzman Enterprises Inc. v. Continental Casualty Co., et al., No. 20-2152, D. Colo.).

  • September 18, 2020

    NLRB Won't Reopen Record On McDonald's Joint Employment After Settlement Order

    WASHINGTON, D.C. — A three-member panel of the National Labor Relations Board (NLRB) on Sept. 16 declined to reopen the record and reconsider a Dec. 12 order in which an NLRB panel ruled 2-1 to vacate an administrative law judge's (ALJ) order that denied approval of multiple settlement agreements involving McDonald's USA LLC, McDonald's Restaurants of Illinois Inc. and a large number of franchisees accused of retaliating against workers involved in an organizing campaign for higher pay based on a lack of finding that McDonald's USA was a joint employer and remanded the case to the ALJ with instructions to approve the agreements (McDonald's USA, LLC, et al. and Fast Food Workers Committee, et al., Nos. 02-CA-093893, 04-CA-125567, 13-CA-106490, 20-CA-132103, 25-CA-114819 and 31-CA-127447, NLRB).

  • September 18, 2020

    2nd Circuit Upholds Denial Of Arbitration To Subway In TCPA Action

    NEW YORK — The Second Circuit U.S. Court of Appeals on Sept. 15 affirmed a lower court's denial of a request made by the franchisor of Subway restaurants to arbitrate a putative class action concerning violations of the Telephone Consumer Protection Act (TCPA) because an agreement to arbitrate does not exist between the parties under New York law (Luis Arnaud v. Doctor's Associates, Inc., No. 19-3057, 2nd Cir., 2020 U.S. App. LEXIS 29504).

  • September 18, 2020

    5th Circuit Issues 2 Rulings In Franchisee Worker's Bias, Retaliation Suits

    NEW ORLEANS — A former employee of an Ameriprise franchisee may proceed with allegations against a practice affiliated with Ameriprise that she was fired in retaliation for complaining of gender bias, but failed to successfully challenge a federal court's jurisdiction over her challenge of an arbitration award dismissing her claims against the franchisees, a Fifth Circuit U.S. Court of Appeals panel ruled in two separate opinions, one issued Sept. 15 and the other on Sept. 11 (Denise A. Badgerow v. Greg Walters, et al., No. 19-30766, 2020 U.S. App. LEXIS 29339, Denise A. Badgerow v. REJ Properties, Incorporated, No. 19-30584 and 19-30687, 5th Cir., 2020 U.S. App. LEXIS 28954).

  • September 18, 2020

    Hawthorn Suites Franchisee Sued By EEOC For Harassment, Retaliation

    SEATTLE — The owner of a Kent, Wash., Hawthorn Suites by Wyndham violated federal law when it allowed a manager to sexually harass two housekeepers and retaliate against one of them after she complained, the Equal Employment Opportunity Commission alleges in a complaint filed Sept. 17 in a federal court in Washington (Equal Employment Opportunity Commission v. GIPHX10, LLC, No. 20-1369, W.D. Wash.).

  • September 17, 2020

    Judge Denies Dismissal Of Hotel Franchisor's Case Against Note Guarantor

    NEW YORK — Because a hotel franchisor successfully alleges consideration for a guaranty, a New York federal judge on Sept. 14 refused to dismiss a breach of contract suit against an alleged guarantor of the note related to a franchise agreement (Wyndham Hotel Group International, Inc. v. Silver Entertainment LLC, et al., No. 15-7996, S.D. N.Y., 2020 U.S. Dist. LEXIS 167642).