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Cases, news, issues and legal opinions impacting franchise law

California Judge Dismisses 7-Eleven Franchisees’ Lawsuit, Orders Parties to Reach Joint Agreement

After the National Coalition of Associations of 7-Eleven Franchisees (NCASEF), representing over 7,000 franchisees, filed a proposed class action lawsuit last October against parent company 7-Eleven, Inc. for exerting excessive control over its independent store owners, California federal court "dismissed with prejudice" the lawsuit, ordering both sides to reach a joint agreement on all claims.

NLRB Reinstates Obama-Era Browning-Ferris Joint Employer Decision

The National Labor Relations Board last week unanimously vacated the Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. decision, which overturned the 2015 Browning-Ferris Industries Obama-era ruling that vastly expanded the definition of joint employer, determining that franchisors could be held liable with their franchisees on labor violations, even if the firms did not exert excessive control over franchisees' employment policies.

KFC Franchisee Can No Longer Serve Muslim Friendly 'Halal' Chicken

A long-standing, multi-unit Muslim franchisee lost his court battle last month when an Illinois federal judge ruled that he could no longer market and sell Halal chicken in his KFC restaurants, which he said had proven to be quite a lucrative business, especially in Muslim communities in Chicago.

Papa John’s Franchisee Settles with New York AG for Cheating Workers Out of Pay

New York Attorney General Eric T. Schneiderman announced Friday that his office had reached a $170,000 settlement with a Papa John's franchisee in Brooklyn that will allow 100 underpaid workers restitution and damages.

Judge Rules Baskin-Robbins Add-On Charge on Products Is Not a Fee

Baskin-RobbinsA judge has ruled that Baskin-Robbins' "commercial factor" charge on ice cream and related products is not an unauthorized additional fee imposed on its franchisees as the Association of Independent BR Franchise Owners claimed.

Dealership Claims after Andy Mohr Truck Centers v. Volvo Trucks North America

The recent Seventh Circuit opinion reversing a $6.5 million-dollar verdict against Volvo Trucks North America appears, on its face, to be a blow against franchisees.  But the opinion is not fatal to dealer claims and provides an important silver lining.

BikeCaffe Settles with California Commissioner for Selling Unregistered Franchises

California's Commissioner of Business Oversight reached a settlement with Ralph Massetti and his franchise development firm, The Franchise Builders, for selling BikeCaffe franchises on the internet that were not registered or exempt according to state franchise regulations. Founder Will Shakesheff, chief franchise operations officer, was also named in the state's action against the franchisor.

Court Rules Franchise Laws Reflect Fundamental State Policies That Cannot Be Disclaimed by Contract

An Arizona court has ruled that franchise disclosure laws reflect fundamental state policies, which cannot be disclaimed by contract fine print in Zounds Hearing Franchising, LLC v. Bower.

Court Overturns Franchisee’s $6.5M Jury Verdict Finding 'No Unfair Discrimination'

Although the Indiana Deceptive Franchise Practices Act prohibits franchisors from "discriminating unfairly among its franchisees" in relation to the franchise agreement, an appeals court did not find that in a case where the franchisee claimed its franchisor gave other dealerships more favorable pricing.

Multi-Brand Franchisee Resentenced to 5 Years in Prison, $5.5M in Restitution for Bank Fraud

The Department of Justice, U.S. Attorney Office for the Western District of Missouri, announced last week that a former owner of multiple franchised restaurants was resentenced for a more than $5.5 million bank fraud scheme, increasing his initial one-year, one-day sentence to five years without parole.