Blog Banner Image

The Franchise Memorandum

Posts from July 2016 - Issue 207.
Posted in Trademarks

In MPC Franchise, LLC v. Tarntino, 2016 WL 3512500 (2d Cir. June 27, 2016), the United States Court of Appeals for the Second Circuit affirmed a ruling cancelling a federal trademark registration on the grounds that it was obtained by fraud in violation of the Lanham Act. MPC, a franchisor of Pudgie’s pizza restaurants in upstate New York, brought suit against a nephew of the original Pudgie’s founder after the nephew, Brent Tarntino, applied for and received registration of the mark PUDGIE’S for use with restaurant services. MPC alleged that Tarntino procured the mark ...

Email LinkedIn Twitter Facebook
Posted in Arbitration

Former Florida franchisees brought a complaint for $14 million in damages against Del Taco, a Mexican and American food quick service restaurant franchisor headquartered in California. Following a five-day arbitration in Los Angeles, a panel of three arbitrators found in Del Taco’s favor on all counts. Floridel, LLC v. Del Taco, LLC, AAA No. 01-14-0001-9403 (June 15, 2016). Gray Plant Mooty represented Del Taco in the arbitration. The claimants, a corporation and its principals who had developed three Del Taco restaurants in Florida, brought claims in late 2014, alleging that ...

Email LinkedIn Twitter Facebook
Posted in Class Actions

A federal judge in California last week certified for class action treatment a case brought by a group of workers at five franchised McDonald’s restaurants. Ochoa v. McDonald’s Corp., No. 3:14-cv-02098 (N.D. Cal. July 7, 2016). Because the franchisee in this closely-followed case has settled with the plaintiffs, the class was certified to pursue claims against only McDonald’s Corp. and McDonald’s USA, LLC, which remain in the case on the theory of “ostensible agency.” As reported in Issue 198 of The GPMemorandum, summary judgment already has been denied on ostensible ...

Email LinkedIn Twitter Facebook

In Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., the United States Court of Appeals for the First Circuit held that an Oregon subfranchisor’s continuing interaction with Baskin-Robbins after Baskin had moved its headquarters from California to Massachusetts was sufficient to support specific personal jurisdiction over the subfranchisor in Massachusetts. 2016 WL 3147645, __ F.3d __ (1st Cir. June 6, 2016). Gray Plant Mooty represented Baskin-Robbins in the case.

The focus of the court’s decision was primarily on whether the subfranchisor had “purposefully ...

Email LinkedIn Twitter Facebook

An Alabama federal court granted the motion of a franchisor’s affiliate to be dismissed from a putative class action in Lee v. Hyundai Motor America, Inc., 2016 WL 3194532 (N.D. Ala. June 9, 2016). Lee had sued both Precision Tune Auto Care, an entity related to Precision Franchising, LLC, the franchisor of retail automotive repair shops, along with automaker Hyundai, alleging that a defective aftermarket oil filter purchased from a Precision Tune franchise in Alabama had caused the engine to fail in his Hyundai car. Lee sued for violations of the Alabama Deceptive Trade Practices ...

Email LinkedIn Twitter Facebook

Following a bench trial, a Missouri federal court found an automobile cosmetic repair franchisor not liable to a former master franchisee under the Texas Business Opportunity Act (“TBOA”). Restored Images Consulting, LLC v. Dr. Vinyl & Assocs., Ltd., 2016 WL 3064142 (W.D. Mo. May 31, 2016). Restored Images had been a franchisee of Dr. Vinyl before entering into a master franchise agreement with Dr. Vinyl. The master franchise agreement obligated Restored Images to sell a minimum number of franchises, though Restored Images repeatedly repudiated this obligation, and the ...

Email LinkedIn Twitter Facebook
Posted in Damages

The Court of Appeals of Georgia held that a franchisee was not entitled to damages for negligent misrepresentation because the franchisee failed to prove that it suffered actual economic damages as a result of the alleged misrepresentation. Legacy Acad., Inc. v. Dole-Smith Enters., Inc., 2016 WL 3208751 (Ga. Ct. App. June 9, 2016). In so holding, the court overturned a jury verdict in the franchisee’s favor. In 2006, Dole-Smith Enterprises spoke to several potential franchisors about purchasing a daycare franchise. During those discussions, Legacy Academy provided ...

Email LinkedIn Twitter Facebook
Posted in Class Actions

A New Jersey state court granted a franchisor’s motion to dismiss a class-action complaint because the court found that, based on the language of the franchise agreements, only the franchisees could be at fault. Frate v. Dunkin’ Brands, Inc., 2016 WL 3542402 (N.J. Super. Ct. Law Div. June 28, 2016). Gray Plant Mooty represented the franchisor in this case. The plaintiffs alleged that various New Jersey franchisees had improperly assessed sales tax on bottled water and prepackaged coffee, which are goods that may qualify as grocery items and thus be exempt from New Jersey sales ...

Email LinkedIn Twitter Facebook

A federal court in New Jersey granted 7-Eleven’s motion for summary judgment on a franchisee’s four counterclaims that 7-Eleven: (1) violated the New Jersey Franchise Practices Act (“NJFPA”); (2) breached the implied covenant of good faith and fair dealing; (3) violated the federal Fair Labor Standards Act (“FLSA”); and (4) violated the New Jersey Law Against Discrimination (“NJLAD”). 7-Eleven, Inc. v. Sodhi, 2016 WL 3085897 (D.N.J. May 31, 2016). After identifying accounting discrepancies in the records of Sodhi, its franchisee, 7-Eleven terminated the ...

Email LinkedIn Twitter Facebook

The United States Court of Appeals for the Seventh Circuit last week issued a decision upholding the dismissal of claims challenging the publication of a settlement in a franchise disclosure document. Caudill v. Keller Williams Realty, Inc., No. 15-3313 (7th Cir. July 6, 2016). Franchisor Keller Williams had settled a case brought by a former franchisee who later had become a regional director of the franchisor. The settlement, like many, was subject to a confidentiality provision that specifically covered the amount paid to the plaintiff in the settlement. Importantly, the ...

Email LinkedIn Twitter Facebook

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. 

To subscribe to monthly emails for The Franchise Memorandum, please click here




















Blog Authors