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Cases, news, issues and legal opinions impacting franchise law

Franchise Terminations and Self-Inflicted Harm

In a recent franchise case the United States District Court of New Jersey (the “Court”) hammered another nail in the termination coffin of a former 7-Eleven franchisee Karamjeet Sodhi ("Franchisee Sodhi" or "Mr. Sodhi"), Manjinder Singh, and Karamjit Singh (collectively, "the Franchisees"), when it denied the Franchisees’ Motion for a stay of the Court's Order granting judgment to Plaintiff 7-Eleven.

Former Liberty Tax Franchisee Awarded $2.7 Million in Bench Trial

A federal judge in Norfolk, Virginia issued a decision last Friday in favor of a multi-unit tax franchisee in New York for $2.7 million, finding Liberty Tax breached its franchise agreement. The judge determined that Liberty Tax's breach of contract happened "the moment it accepted an application from someone else to buy the franchisee's eight stores."

Dickey’s Franchisees Denied Consolidation of Claims into One Arbitration

A California federal court last month denied Dickey's Barbecue franchisees' motion for an order to consolidate their claims into a single arbitration, in a dispute alleging the franchisor made false and misleading representations in selling franchises.

Appeal to Hold Saladworks Liable for Franchisee’s Employee Workers’ Comp Claim Dismissed

The Pennsylvania Supreme Court issued its decision on December 16, 2016 dismissing an appeal of a previous ruling. It ruled that franchisor Saladworks has no liability to its franchisee's employees for claims under workers' compensation laws.

Avenue Capital Again Defeated by Quiznos’ Ric Schaden Executive Team

Multi-billionaire Marc Lasry, CEO/chairman of privately-held Avenue Capital Group, with other hedge fund firms, lost another court battle in the ongoing lawsuit asserting that Richard "Ric" Schaden and his former Quiznos executive team had engaged in a "conspiracy to defraud" when investors took over the troubled sandwich chain in 2012.

Franchisee Faces 30 Year Prison Term, $1 Million Fine on Guilty Plea to Bank Fraud

A franchisee of Electrolux International is facing 30 years in prison after pleading guilty to bank fraud and money laundering charges on December 8, 2016, before U.S. District Court Judge Sylvia H. Rambo in Harrisburg, Pennsylvania.

L.A. Tan Settles First Fingerprint Scan Class Action for $1.5M

A court in Chicago issued its approval this month for a $1.5 million settlement in the first of two class action lawsuits filed against L.A. Tan Enterprises, Inc. and some of its local franchisees claiming they mishandled customers' biometric information, mainly collected from fingerprint scans.

Judge’s Surprise Injunction Stalls New Overtime Rules for Employers

Many employers and franchise owners weren’t looking forward to December 1st when new labor laws were set to take place that would dramatically increase the amount of employees elig

New York Supreme Court Appellate Affirms Jan-Pro Cleaning Franchisee Is Employee of Sub-Franchisor

The Appellate Division of the New York Supreme Court has affirmed the rulings by the state's Unemployment Appeal Board that some of Jan-Pro Cleaning Systems franchisees were actually employees of the sub-franchisor, PD 10276, Inc., for unemployment tax purposes, and not independent contractors.

Franchisor McDonald’s to Settle with Franchisee’s 800 Workers in Wage-Theft Lawsuit, Paying $3.75M

McDonald's workersPresumably for the first time, McDonald's Corporation has agreed to settle claims that it was liable for labor law violations by a franchisee because it was a "joint employer" of the workers at five franchised restaurants in California.