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Log In / Register | May 2, 2016

Chicken Little and the NLRB: Franchisor Joint-Employers Are Falling Everywhere

Like the plummeting acorn that caused Chicken Little to conclude that the sky is falling, the recent NLRB Browning-Ferris decision (“NLRB decision”) has triggered franchisors, and some of their franchisees, to publicly and loudly proclaim that “franchising is doomed.” This forewarning is at best a great miscalculation, and at worst an intentional exaggeration.

Terminated Franchisee Beats the Odds, Sidesteps Injunction

In a recent decision by the United States District Court for the District of Colorado, the Court denied the plaintiff franchisor’s motion for a preliminary injunction, showing that, in rare situations, it is possible for a terminated franchisee to escape the lethal injunctive pincers of the Lanham Act, the federal law that is frequently relied upon by franchisors to shut down a franchisee’s operations during termination disputes.

In Minnesota It Takes the Wizard of Oz to Prove Franchisor Fraud

The United States District Court for the District of Minnesota on January 12, 2016, in Moxie Venture L.L.C., et al. v. The UPS Store, Inc., 2016 U.S. Dist. LEXIS 3603, hammered the final nail in the coffin of franchisee fraud claims under the Minnesota Franchise Act.

Child Care Franchisee Wins Non-Compete Case by Confusing Everyone

In The Art of War, Sun Tzu states, inter alia, that "The whole secret lies in confusing the enemy, so that he cannot fathom our real intent." Sometimes, but not often, this strategy, if used by a franchisee, works in combatting the enforcement of a post term restrictive covenant following a franchise termination.

Franchisee’s Wrongful Termination Claim Is Rejected for Failure to Obtain Franchisor Consent to Its Franchise Purchase

In a recent case in the United States District Court for the Eastern District of Wisconsin, a federal court reversed its own initial decision in which it had upheld a franchisee's wrongful termination claim against its franchisor. Tex. Ujoints, LLC v. Dana Holding Corp., 2015 U.S. Dist. LEXIS 70468 (E.D. Wis., May 30, 2015).

Franchise Ownership, Myths and Guinea Pigs

There are some lies in society that are immune to obliteration in the normal course; they simply, for various reasons, sustain themselves as accepted truths over incredibly long periods of time.

Franchisor Retaliation Okay if Franchisor 'More Believable' than Franchisee

In Percy Pooniwala, and Dinaz Pooniwala,v. Wyndham Worldwide Corp., Super 8 Worldwide, Inc., Travelodge Hotels, Inc., and Days Inn Worldwide, the matter was before the Court on Plaintiffs Percy Pooniwala's ("P. Pooniwala") and Dinaz Pooniwala's ("D. Pooniwala") (collectively, "Plaintiffs") Motion for Preliminary Injunction against Defendants Wyndham Worldwide Corp. to enjoin Defendants from taking actions relating to various franchise agreements. For the reasons set forth below, the Court denied the motion.

Are They Franchisees or Employees? Court Not Impressed with CleanNet's Tactics

This putative class action of Sanchez v. CleanNet USA, Inc., 2015 WL 231450 (N.D. Ill. 2015) arises out of Plaintiff Jose Sanchez's participation as a franchisee in a nationwide network of commercial cleaning franchise businesses.

Franchisor Control Problems and the Alexander Haig Solution

A recent case in California federal court, Vann v. Massage Envy Franchising LLC, 2015 WL 74139 (S.D.Cal. 2015), has given franchisors a win on a fact-specific application of the "employer control" issue in a vicarious liability setting.

Governor Brown’s Veto of the Franchise Legislation, Cold Turkey Legs, Churning and Mud-Slinging

Governor Brown’s recent veto of the proposed California franchise legislation was momentously stunning in light of his political background, the legislature’s strong support for the proposal, and the relatively unthrusting additional functional protection that the legislation would have provided to franchisees. Why did he veto the legislation?