CFIL – Franchise Focus

Absolute USA, Inc. v. Harman Professional, Inc.: A Thorough Analysis of the Elements of a Franchise and the Statute of Limitations Under the California Franchise Investment Law

Feb 14, 2023Legal AlertsCalifornia, CFIL

Executive Summary In a slip opinion, Judge Maame Ewusi-Mensah Frimpong of the United States District Court for the Central District of California analyzed a dealer agreement between the plaintiff and defendant and found that the plaintiff failed to establish the existence of a franchisor-franchisee relationship because plaintiff failed to demonstrate the existence of a marketing system or franchise fee. The […]

Servpro Industries, Inc. v. Woloski: Court of Appeals Affirms Franchisor’s Right to Protect Franchise System from Reputational Harm

Mar 4, 2022Legal AlertsCFIL, Reputational Harm

Executive Summary: In an unpublished decision, Circuit Judge Griffin of the United States Court of Appeals, Sixth Circuit, affirmed the United States District Court for the Middle District of Tennessee’s dismissal of Defendants’ California Franchise Relations Act (“CFRA”) counterclaim and affirmed the District Court’s grant of summary judgment on Defendants’ breach of contract counterclaim relying on brand standards related language. […]

Haitayan v. 7-Eleven: District Court Finds Franchisor does not Exercise Enough Control over Franchisees for them to be Considered Employees

Sep 8, 2021Legal AlertsABC Test, Borello Test, California, CFIL, Employment Law, Independent Contractor

Executive Summary: In an unpublished decision, Judge Fischer of the United States District Court for the Central District of California found in favor of 7-Eleven and against franchisees on the issue of whether 7-Eleven franchisees are employees. While the judge acknowledged the rationale of the District Court of Massachusetts in Patel v. 7-Eleven, Inc., he ultimately found that 7-Eleven does […]

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Executive Summary: In an unpublished decision, Magistrate Judge Hanna of the United States District Court for the Western District of Louisiana ruled against a motion to transfer to California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, […]

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 […]

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 […]

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”) […]

Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC: Court Finds Incorporation of Arbitration Rules Allows Arbitrator to Determine Arbitrability of Dispute

Jul 9, 2020Legal AlertsCFIL, Federal Court

Executive Summary: In an unreported decision, Judge Freeman of the United States District Court for the Northern District of California granted a franchisor’s motion to stay proceedings pending arbitration finding that the parties delegated the question of arbitrability to the arbitrator to decide by incorporating, by reference, the AAA and NAF arbitration rules. Citation: Esguerra-Aguilar, Inc. v. Shapes Franchising, LLC, 2020 […]

BP Products North America Inc. v. Petroleum: Yet Another Lesson in the Need for Clarity for Potential Costs for Franchisees

Apr 27, 2020Legal AlertsCFIL

Executive Summary: In an unreported decision, Judge Rogers of the United States District Court for the Northern District of California denied a franchisor’s motion for a preliminary injunction against a franchisee who was previously terminated for failing to implement a new marketing program based on the franchisee’s argument that the franchise agreement did not “require” it to take on these additional […]