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Mealey's Franchise

  • September 24, 2018

    Federal Judge Partly Dismisses Franchisee’s Counterclaims As Untimely

    NEW YORK — Allegations by a franchisee that its franchisor violated New York franchise laws were partly dismissed Sept. 20 by a New York federal judge on grounds that the parties’ original agreement is outside the applicable statute of limitations (Safe Step Walk In Tub Co. v. CKH Industries Inc., No. 15-7543, S.D. N.Y., 2018 U.S. Dist. LEXIS 161082).

  • September 23, 2018

    9th Circuit Hears Arguments In Dispute Over Dealership Location, Lease

    SAN FRANCISCO — A franchisee told the Ninth Circuit U.S. Court of Appeals at oral arguments on Sept. 10 that its franchisor’s refusal to allow the franchisee to relocate violates California state law and constitutes breach of contract (Mathew Enterprise Inc. v. FCA US LLC, Nos. 17-15060, -17392, 9th Cir.).

  • September 21, 2018

    Judge Says Issues Of Fact Exist, Denies Government’s Motion In GM Bailout Suit

    WASHINGTON, D.C. — A U.S Court of Federal Claims judge on Sept. 17 denied a motion for summary judgment filed by the U.S. government after determining that issues of fact exist regarding whether the U.S. government’s action in connection with the General Motors Corp.’s bailout amounted to a taking of the franchise agreements of former GM auto dealer franchisees without just compensation (Colonial Chevrolet Co. Inc., et al. v. United States, Nos. 10-647C, 11-100C, 12-900C, Fed. Clms., 2018 U.S. Claims LEXIS 1190).

  • September 20, 2018

    Bankruptcy Judge: Claims Should Be Trimmed In Ford Franchise Managers’ Suit

    BIRMINGHAM, Ala. — An Alabama bankruptcy judge issued a report and recommendation on Sept. 17 in an adversary proceeding between two former Ford franchise managers recommending partial summary judgment for the manager with majority interest, allowing the manager with minor interest to proceed with claims of conversion (In re: Frank A. Moultrie, No. 16-574, Frank A. Moultrie v. Ford Motor Company, et al., No. 16-78, N.D. Ala. Bkcy., 2018 Bankr. LEXIS 2820).

  • September 19, 2018

    Claims Trimmed In Class Suit Against Waffle House Over Hepatitis A Exposure

    ASHLAND, Ky. — A Kentucky federal judge on Sept. 14 granted two motions for partial dismissal in a class lawsuit over customers being allegedly exposed to hepatitis A at two Waffle House locations, rejecting certain claims by those customers who weren’t infected and those who never showed that they actually purchased food or drinks and rejecting certain claims against the defendants who serve only as franchisor and lessor (Paul Diamond, et al. v. Waffle House, Inc., et al., No. 18-49, E.D. Ky., 2018 U.S. Dist. LEXIS 157087).

  • September 18, 2018

    Porsche Dealer Sues Former Employee Alleging Fraudulent Buyer Agreement Scheme

    FORT LAUDERDALE, Fla. — A Porsche dealership filed suit in a Florida court on Sept. 6, alleging that its former employee concocted a scheme through which he defrauded customers out of $2.5 million in deposits for vehicles that never existed (Copans Motor Inc. v. Shiraaz Sookralli, et al., No. 18-021221, Fla. Cir., 17th Jud. Cir., Broward Co.).

  • September 18, 2018

    EEOC Sues Taco Fast Food Chain For Sexual Harassment, Retaliation

    LOS ANGELES — The Equal Employment Opportunity Commission filed a complaint on Sept. 17 in a California federal court accusing a taco fast food chain with hundreds of corporate owned and franchise locations of failing to protect young female workers from sexual harassment and retaliation by at least three male shift leaders and managers (U.S. Equal Employment Opportunity Commission v. Del Taco, LLC, et al., No. 18-1978, C.D. Calif.).

  • September 17, 2018

    5th Circuit Affirms Ruling Requiring Franchisee To Pay Fees

    NEW ORLEANS— A Fifth Circuit U.S. Court of Appeals panel on Sept. 13 upheld a federal judge in Texas’ ruling ordering a regional franchisee owner to pay fees pursuant to a personal guarantee that was signed in relation to an agreement to lease franchise units in the United Kingdom (Jani-King Franchising Inc. v. Jani-King [GB] Ltd., et al., No. 3:13-cv-0413, 5th Cir., 2018 U.S. App. LEXIS).

  • September 17, 2018

    Safe Company Asks 11th Circuit To Affirm Denial Of Class Certification

    ATLANTA — A franchisor on Sept. 12 opposed an appeal filed by franchisees in the 11th Circuit U.S. Court of Appeals, arguing that the court should affirm a judge’s decision refusing to certify two classes of franchisees of the Wyndham Hotel Group who received faxes from a safe company (Gorss Motels Inc., et al. v. Safemark Systems LP, No. 18-12511, 11th Cir.).

  • September 13, 2018

    Judge Holds Hotel Franchisor Is Entitled To $1.29M In Liquidated Damages

    SPOKANE, Wash. — After holding that a liquidated damages provision in franchise license agreements for hotels was enforceable, a Washington federal judge on Sept. 6 granted summary judgment for a hotel franchisor on all of its claims in relation to breaches of the agreements by franchisees (Red Lion Hotels Franchising Inc. v. First Capital Real Estate Investments, LLC, et al., No. 2:17-CV-145, E.D. Wash., 2018 U.S. Dist. LEXIS 152430).

  • September 13, 2018

    NLRB Issues Proposed Changes To Joint-Employer Status

    WASHINGTON, D.C. — The National Labor Relations Board on Sept. 13 announced proposed changes to the joint-employer standard, to be published in the Federal Register on Sept. 14, that will narrow the definition.

  • September 13, 2018

    Preliminary Injunction Granted In Suit Over Franchisee’s Competing Business

    LAYTON, Utah — A Utah federal judge on Sept. 10 ruled that a franchisor met “its heavy burden” and showed that it was entitled to a preliminary injunction against a franchisee who opened a competing business within the office of one of his franchises (Property Management Business Solutions v. Randall Averitte, No. 18-552, D. Utah, 2018 U.S. Dist. LEXIS 154644).

  • September 13, 2018

    Ruling On Joint Employment In Harassment Suit Vacated, Remanded By 7th Circuit

    CHICAGO — A trial court erred by not employing the correct test when deciding that the company responsible for hiring, supervising and firing workers of a hotel franchise was not a joint employer of the workers, the Seventh Circuit U.S. Court of Appeals ruled Sept. 11, vacating and remanding for further consideration (Bogustawa Frey v. Hotel Coleman, et al., No. 17-2267, 7th Cir., 2018 U.S. App. LEXIS 25717).

  • September 13, 2018

    Franchisee Asks Federal Court To Stay Order Granting Preliminary Injunction

    CHICAGO — One day after a judge granted a franchisor’s motion for a preliminary injunction in a breach of contract dispute over a franchise agreement, the franchisee on Sept. 5 moved to stay the order until the franchisor has provided the security that the franchisee argues is required under Federal Rule of Civil Procedure 65(c) (Brightstar Franchising LLC v. Northern Nevada Care, Inc., et al., No. 17-9213, N.D. Ill., 2018 U.S. Dist. LEXIS 150769).

  • September 12, 2018

    Washington Supreme Court Asked To Decide 2 Questions About Franchisor’s Markup

    SEATTLE — A Washington federal judge on Sept. 7 denied a franchisor’s request for reconsideration or certification for interlocutory appeal to the Ninth Circuit U.S. Court of Appeals in a case concerning a more than 100 percent markup on services provided to franchisees and instead certified two questions to the Washington Supreme Court on the state’s restrictions on selling services to franchisees (Money Mailer, LLC v. Wade G. Brewer, No. 15-1215, W.D. Wash., 2018 U.S. Dist. LEXIS 153090).

  • September 11, 2018

    Judge Refuses To Dismiss 2 Claims In Franchisee’s Suit Against Ice Cream Franchisor

    SAN DIEGO — A California federal judge on Sept. 6 tentatively denied an ice cream franchisor’s motion to dismiss two claims alleging that it violated California Corporations Code but  refused to reach a tentative decision as to its motion to dismiss claims the unfair business practices claims and its motion to transfer the breach of contract and declaratory relief claims to a federal court in Ohio (Kenneth Schulenburg, et al. v. Handel's Enterprises, Inc., et al., No. 18-513, S.D. Calif., 2018 U.S. Dist. LEXIS 153129).

  • September 10, 2018

    Judge Finds Former Franchisees In Contempt For Violating Preliminary Injunction

    CHARLOTTE, N.C.— A federal judge in North Carolina on Sept. 6 found that three former franchisees violated the terms of a 2016 preliminary injunction that barred them from continuing to operate vehicle pinstriping services, finding that evidence presented during a bench trial showed that they continued to solicit customers after the franchise agreements were terminated (Atlantic Pinstriping LLC, et al. v. Atlantic Pinstriping Triad LLC, et al., No. 16-CV-547, W.D. N.C., 2018 U.S. Dist. LEXIS 151952).

  • September 6, 2018

    Judge Enters Default Judgment Against Franchisees, Orders Them To Pay $117,614.21

    NEWARK, N.J. — A New Jersey federal judge on Aug. 22 granted Howard Johnson International Inc.’s motion for a default judgment against two franchisees in its lawsuit alleging that they breached a franchise agreement for the operation of a 65-room Georgia hotel, ordering the franchisees to pay $117,614.21 for recurring fees and liquidated damages that are owed under the agreement and prejudgment interest at 1.5 percent per month (Howard Johnson International, Inc. v. Jay Shree Ganesh LLC, et al., No. 17-4658, D. N.J., 2018 U.S. Dist. LEXIS 142924).

  • September 6, 2018

    More Time To Iron Out Settlement Granted In Motel 6 Guest List Suit

    PHOENIX — An Arizona federal judge on Aug. 20 granted a joint motion seeking additional time to complete a settlement agreement in a class complaint accusing Motel 6 Operating L.P. and G6 Hospitality LLC, doing business as Motel 6, of voluntarily turning over guest registration information to agents of U.S. Immigration and Customs Enforcement (ICE) within the Department of Homeland Security (DHS) (Jane V., et al. v. Motel 6 Operating L.P., et al., No. 18-242, D. Ariz.).

  • September 5, 2018

    Wyoming High Court Upholds Firing Of 2 Who Tried To Open Different Franchise

    CHEYENNE, Wyo. — A franchisor properly followed its unambiguous employment agreements with two of its executives when it fired them for cause after discovering their involvement in a business plan to open an unrelated franchise, the Wyoming Supreme Court ruled Aug. 22 (Dan B. James, et al. v. Taco John’s International, Inc., No. S-17-0339, Wyo. Sup., 2018 WY 96).