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 […]
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 […]
Executive Summary: In an unpublished decision, Judge Staton of the United States District Court for the Central District of California denied a plaintiff franchisee’s motion or summary judgment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 […]
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 […]
Executive Summary: In a reported decision, Judge Barker of the United States District Court for the Northern District of Ohio found that in order to successfully rescind a franchise agreement under the California Franchise Investment Law a franchisee must prove that the violation was willful and the plaintiff relied on the violation in entering into the contract and that the violation caused damages. Citation: Handel’s […]
Executive Summary: In a reported decision, Judge Wick of the California Court of Appeal, First District, Division 3, found that the forum selection clause in a contract between plaintiff and defendant was invalid based on a predispute jury waiver. Citation: Handoush v. Lease Finance Group, LLC, 41 Cal.App.5th 729 (2019). Relevant Background: On January 21, 2016, Zeaad Handoush (“Plaintiff”) filed suit […]
Executive Summary Governor Newsom signs AB5 into law making it effective January 1, 2020. The law does not address many questions for the franchise industry. Franchisors and franchisees should not expect these questions to be resolved until they are before the California Supreme Court, which could be years. Analysis Only a day after the California Assembly voted to send AB5 to this desk for […]
Executive Summary The California Assembly has voted in concurrence with the Senate Amendments of AB5 and has sent the bill to Governor Newsom’s desk for signature or veto. Governor Newsom has publicly expressed support for the bill. Analysis On September 11, 2019, the California Assembly denied a procedural vote supported by Republicans in the Chamber (16 Ayes, 53 Noes, 10 […]
Executive Summary The California Senate passed AB5. The bill now moves to the Assembly for concurrence. Analysis On September 10, 2019, the California Senate passed AB5 as amended on September 6, 2019. Votes for AB5 broke down along partisan lines with 29 ayes, 11 noes, and 0 no votes recorded.The bill will now move back to the California Assembly for […]
Executive Summary The California Senate has amended AB5 one last time before coming to a floor vote. While several of the amendments are superfluous purpose statements and findings, technical changes that have no objective impact on the law, and small clarifications regarding individuals who were already covered or carved out from the bill (i.e., licensed manicurists), there are two notable […]