Franchise Focus

Krispy Krunchy Foods LLC v. Jenna Marketing LLC: Louisiana District Court Denies Motion to Transfer by California “Member” Based on Post-COVID-19 Technological Advances

Apr 21, 2021Legal AlertsCalifornia, CFIL, Federal Court, Forum Selection Clause

Executive Summary: In an unpublished decision, Magistrate Judge Hanna of the United States District Court for the Western District of Louisiana ruled against a motion to transfer to California made by a California member / franchisee even where there was no forum selection clause. Citation: Krispy Krunchy Foods LLC v. Jenna Marketing LLC, 2021 WL 1916151 (W.D. La. Apr. 16, […]

California Assembly Amends AB257 and Risks Destroying California Franchising

Mar 26, 2021Statute TrackingCalifornia, Employment Law, Joint Employer, Labor Law, Unionization

Executive Summary The California Assembly has amended AB257 dramatically. While the amendments are numerous, the two most controversial would establish a new legislative body known as the Fast Food Sector Council that has the power to set rules and wages for fast food restaurants and codify franchisors and franchisees as joint employers. Analysis AB257 has been amended substantially. The Legislative […]

Postnet International Corporation v. Wu: Colorado District Court Enforces Colorado Forum Selection Clause for California Franchisee

Feb 19, 2021Legal AlertsCalifornia, CFIL, Federal Law, Forum Selection Clause, Jurisdiction, Preemption

Executive Summary: In a published decision, Judge Domenico of the United States District Court for the District of Colorado ruled against a franchisee’s motion to dismiss where the franchisee challenged the validity of a Colorado forum selection clause. Citation: Postnet International Franchise Corporation v. Wu, 521 F.Supp.3d 1087 (D. Col. 2021). Relevant Background: PostNet International Franchise Corporation (“Franchisor”) maintains its […]

Shaw v. Ultimate Franchises, Inc.: Court Denies Affirmative Motion for Summary Judgment Against a Franchisor Consultant for Fraud

Jan 15, 2021Legal AlertsCalifornia, CFIL, Fraud, Item 19

Executive Summary: In an unpublished decision, Judge Staton of the United States District Court for the Central District of California denied a plaintiff franchisee’s motion or summary judgment regarding fraud actions asserted against a franchisor consultant. Citation: Shaw v. Ultimate Franchises, Inc., 2021 WL 678687 (C.D. Cal. Jan. 15, 2021). Relevant Background: Ultimate Franchises, Inc. (“Franchisor”) operated a beauty salon […]

California Assembly Introduces Bill To Radically Govern the Fast Food Industry

Jan 15, 2021Statute TrackingCalifornia, Employment Law, Joint Employer, Labor Law, Unionization

Executive Summary The California Assembly has introduced a bill that is meant to “safeguard” fast food industry workers who the assembly states have been mistreated, harassed, and discriminated against. The scope of the bill is not yet clear but is being heavily supported by California unions. Citation The FAST Recovery Act Analysis On January 15, 2021, Democratic Assembly Member Gonzalez–the […]

Jack in the Box Inc. v. San-Tex Restaurants, Inc.: A Lesson in how Doing Everything Right is Sometimes Not Enough to Prevent a Facially Frivolous Lawsuit

Jan 14, 2021Legal AlertsCFIL, CFRA, CUPA, Federal Court, Jurisdiction, Texas

Executive Summary: In an unpublished decision, Judge Rodriguez of the United States District Court for the Western District of Texas denied Jack-in-the-Box’s motion to dismiss counterclaims brought against it by a franchisee that had been in default for more than two years, was terminated, and continued to operate the franchise after termination. Citation: Jack in the Box Inc. v. San-Tex […]

Ronald Cohn, Inc. v. Sprouts Farmers Market, Inc.: Court Allows Old Unfair Competition Claim to Proceed

Jan 13, 2021Legal AlertsStatute of Limitations, Unfair Competition

Executive Summary: In an unpublished decision, Judge Houston of the United States District Court for the Southern District of California denied Sprouts Farmers Market, Inc.’s motion to dismiss California Unfair Competition Law Claims based exclusively on alleged violations of the California Franchise Investment Law from, at the latest, 2011. Citation: Ronald Cohn, Inc. v Sprouts Farmers Market, Inc., 2021 WL […]

Patel v. 7-Eleven, Inc.: Federal Court Finds that FTC Franchise Rule Preempts State ABC Independent Contractor Test

Sep 10, 2020Legal AlertsABC Test, Employment Law, Federal Court, Independent Contractor

Executive Summary: In a published decision, Judge Gorton of United States District Court for the District of Massachusetts issued a decision finding that 7-Eleven franchisees claims that they were employees of 7-Eleven corporate pursuant to Massachusetts ABC Test was preempted by the Federal Trade Commission’s Franchise Rule and, therefore, the ABC Test was inapplicable to the franchise industry. Citation: Patel v. 7-Eleven, […]

A.B. v. Hilton Worldwide Holdings Inc.: A Must Read for Hotel Franchisors and Franchisees

Sep 8, 2020Legal Alerts9th Circuit, Employment Law, Independent Contractor, Joint Employer

Executive Summary: In a published decision, Judge Immergut of United States District Court for the District of Oregon granted several hotel franchisors’ motions to dismiss claims that they should be held liable for sex trafficking of a plaintiff that had stayed at their hotels in Oregon and Washington, but the decision’s analysis leaves open several critical questions. Citation: A.B. v. Hilton Worldwide Holdings Inc., […]

T.A.W. Performance, LLC v. Brembo, S.p.A.: Court of Appeal Provides Alternative Approach to Analyzing Jurisdictional Disputes by a Purported California Franchisee

Aug 17, 2020Legal AlertsCFIL, Federal Court

Executive Summary: In a partially published decision, the California Court of Appeal, First District, Division 3, found that it lacked specific jurisdiction over a purported California franchisee without addressing if the CFIL governed their relationship or if the CFIL voided its forum selection clause. Citation: T.A.W. Performance, LLC v. Brembo, S.p.A., 53 Cal.App.5th 632 (2020). Relevant Background: Defendant Brembo, S.p.A. (“Defendant”) […]