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The Franchise Memorandum

Posts from February 2014 - Issue 177.
Posted in Arbitration

In Doctor’s Associates, Inc. v. Edison Subs, LLC, 2014 U.S. Dist. LEXIS 371(D. Conn. Jan. 3, 2014), the United States District Court for the District of Connecticut denied Subway’s motion to compel arbitration of claims arising out of a franchise agreement that Edison assumed pursuant to an oral assignment agreement. Edison, the defendant, did not receive or review the written franchise agreement before assuming it. After being involuntarily ejected from the franchised business premises after two years of operation, Edison filed a complaint in state court alleging breach of ...

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Posted in Arbitration

A federal court in Indiana has granted a franchisor’s motion to stay proceedings in three related lawsuits pending appeal to the Seventh Circuit. Druco Rests., Inc. v. Steak n Shake Enters., 2014 U.S. Dist. LEXIS 8198 (S.D. Ind. Jan. 23, 2014). Three franchisees had filed separate lawsuits against Steak n Shake (“SNS”) alleging breach of contract, fraud, and violations under their respective state franchise laws. After SNS sought to stay all three actions and compel arbitration, the trial court concluded the respective agreements contained only “nonbinding” ...

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In U-Bake Rochester, LLC v. Utecht, 2014 U.S. Dist. LEXIS 7106 (D. Minn. Jan. 21, 2014), the United States District Court for the District of Minnesota recently held that a plaintiff’s prior acknowledgement that it was not a franchisee barred the plaintiff from later asserting claims under Minnesota and Wisconsin state franchise statutes. U-Bake Rochester (“UBR”) executed a trademark license agreement with Utecht Bakeries that allowed UBR to use the U-BAKE trademark in connection with a retail store located in Rochester, Minnesota. After revenues plummeted in its second ...

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In Robinson v. Wingate Inns Int’l, Bus. Franchise Guide (CCH) ¶ 15,197 (D.N.J. Dec. 20, 2013), the court held that the owner of two hotel franchises failed to state actionable franchise sales fraud claims against franchisors Wingate and Wyndham. Robinson, the franchisee, entered into separate franchise agreements with each franchisor, and both businesses subsequently failed as a result of Robinson’s failure to obtain financing. When Robinson filed suit, the franchisors moved to dismiss his claims that they had violated the FTC Rule, committed fraud in the inducement, and ...

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Posted in Trademarks

A federal judge in Seattle has denied a franchisor’s motion for a contempt order to enforce a consent judgment obtained against an accused trademark infringer and his company. Two Men & A Truck/Int’l, Inc. v. T&S Transp., Inc., 2014 U.S. Dist. LEXIS 4759 (W.D. Wash. Jan. 13, 2014). In this case, Two Men and a Truck had sued the defendants for trademark infringement based on their use of various iterations of the plaintiff’s trademark, TWO MEN AND A TRUCK, in connection with moving services identical to those offered by the franchise system. In a consent judgment resolving the ...

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About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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