Blog

https://franchiselaw.foxrothschild.com/

Megan is among the contributors to the firm's Franchise Law Update blog, which highlights not only the regulatory aspects of franchising but also diverse topics such as business finance, employment, litigation and the protection of intellectual property, including trademarks and copyrights.

Recent Blog Posts

  • The Franchisor is Liable for Franchisee’s Submission of Fraudulent Tax Statements?! In Lomeli v. Jackson Hewitt, Inc., the United States District Court in the Central District of California held that the plaintiff, Luis Lomeli (“Lomeli”), had submitted enough evidence to hold the franchisor (“Jackson Hewitt”) vicariously liable for potential class actions due to a franchisee’s preparation and submission of fraudulent tax returns. The most concerning part of this decision is that the Court held that Jackson Hewitt could be directly liable for the fraud claims. This decision is another lesson in... More
  • Broad Provisions in Franchise Agreement: How Far is too Far? The fight against joint employment of franchisors and franchisees took a small hit when the Western District of Pennsylvania (“Court”) chose to allow a franchisee’s employee’s suit to proceed. In Harris v. Midas, et. al., the plaintiff, Hannah Harris (“Harris”), convinced the Court that she had proffered enough evidence to allege a plausible basis to hold the franchisor (“Midas”) as a joint employer and vicariously liable for the franchisee’s conduct with respect to Harris’ sexual harassment claims against her franchisee... More
  • No-Hire and No-Solicit Covenants Could be Overcooked Many franchise agreements contain a provision that restricts a franchisee from hiring or soliciting the employees of the franchisor or other franchisees. A class action lawsuit that was recently filed in the Eastern District of Texas could require removal of this type of provision in the future. Though this suit is only at the initial complaint phase, the outcome of this case could help shape the future of franchisee restrictive covenants. In Ion v. Pizza Hut, LLC, Kristen Ion (“Ion”) filed... More
  • Did You Hear? Watch Out For Ohio’s BOPPA! A recent decision in the United States District Court of Arizona (“Court”) could have far-reaching consequences to many franchisors based on the broad-sweeping principles the Court used in its reasoning. In Zounds Hearing Franchising, LLC et. al. v. Bower et. al., the Court answered the question of whether the Ohio Business Opportunity Purchasers Protection Act (BOPPA) trumps a choice of law and venue provision that provides for the application of law other than the State of Ohio. Here, four franchisees filed... More
  • Successor Liability? Double-Check Those Assets! The intersection of franchise law and general corporate law is extensive. A recent decision in the Michigan Court of Appeals (Court) highlights the importance of thoroughly understanding and considering the ramifications of transactions involving both spheres of law. In Retail Works Funding LLC v. Tubby’s Sub Shops Inc. and JB Development LLC, the plaintiff (Plaintiff) brought suit against each defendant (Tubby’s and JBD or collectively, the Defendants) after JBD purchased the rights and goodwill to the service mark JUST BAKED (Mark)... More
  • No Tip of the Hat to DOL Guidance A recent decision by the Ninth Circuit Court of Appeals (Court) in Marsh v. J. Alexander’s throws a wrench into the equation with respect to the guidance on the tip-credit provision of the Fair Labor Standards Act (FLSA) promulgated by the Department of Labor (DOL). 25151637 – tip jar with british currency and label saying thank you The nine consolidated cases at issue were brought by servers/bartenders against their former employers. Each employee claimed that his respective employer violated the tip-credit provision... More
  • Cities of Wisconsin, BEWARE! A recent decision by the Wisconsin Supreme Court (“Court”) has potentially far-reaching consequences for municipalities and how they conduct certain business. In Benson v. City of Madison, the Court analyzed whether the Wisconsin Fair Dealership Law (“WFDL”) applied to the arrangement between the City of Madison (“City”) and multiple entities, collectively (“Golf Pros”). The City entered into contracts with Golf Pros to operate, manage and provide certain services at the golf courses owned by the City. The City paid Golf Pros a... More
  • Is Everything “Settled” in Your Settlement Agreement? Not Quite! A recent case involving the Whataburger franchise system reminds franchisors of the importance of the use of iron-clad language when granting future development rights. In Whataburger, Inc. et. al. (“Whataburger”) v. Whataburger of Alice, Ltd. (“WOA”), the court was tasked with interpreting the language of a settlement agreement (“Settlement Agreement”) to determine whether WOA had the unfettered right to open new restaurants. Copyright: jagcz / 123RF Stock Photo As background, WOA had previously operated 28 franchised restaurants and sold them to Whataburger... More
  • Is Your Agreement to Arbitrate Valid? Many franchisors employ arbitration as its preferred method of dispute resolution.  Generally, courts view arbitration agreements favorably. An agreement to arbitrate waives the fundamental right to have a court decide the merit of their disputes. As such, valid, enforceable arbitration agreements are required to waive this essential right. Two recent decisions highlight the importance of ensuring that a valid agreement to arbitrate exists between the parties. Copyright: designer491 / 123RF Stock Photo Theo’s Pizza, LLC v. Integrity Brands, LLC In this case, the franchisee... More
  • Accidental Franchisor in Hot Water Safe Step Walk In Tub Co. (“Safe Step”) failed to take the requisite “safe steps” before potentially becoming an accidental franchisor. In Safe Step Walk In Tub Co. v. CKH Industries, Inc., Safe Step filed an action against a licensee, CKH Industries, Inc. (“CKH”) for breach of contract for non-payment of certain fees. CKH filed 22 counter-claims against Safe Step including violation of the Federal Trade Commission Rule on Franchising (“FTC Rule”) as well as the state franchise laws of... More