The Franchise Memorandum

A federal court in Nevada recently transferred a franchisor’s trademark infringement lawsuit to Illinois, the location of the franchise, declining to rule on the franchisor’s motion for preliminary injunction. Hofbräuhaus of Am., LLC v. Oak Tree Mgmt. Servs., 2023 WL 24179 (D. Nev. Jan. 3, 2023).

A federal court in New York has denied a franchisor’s motion for preliminary injunction aimed at preventing a former franchisee from operating a competing business in the same location as its former franchised business because the franchisor did not establish that it would suffer irreparable harm absent an injunction. Doctor's Assocs. LLC v. Khononov, 2023 WL 184389 (E.D.N.Y. Jan. 13, 2023).

A federal court in New Jersey has denied a motion to compel arbitration in a dispute over alleged breach of a franchise agreement. Passion for Restaurants, Inc. v. Villa Pizza, LLC, 2022 WL 18024209 (D.N.J. Dec. 30, 2022).

A federal court in Minnesota has dismissed a claim under the Minnesota Franchise Act (MFA), holding that a franchisor’s consent to the assignment of a franchise does not constitute a sale or an offer to sell under the Act. LG2, LLC, v. Am. Dairy Queen Corp., 2023 WL 171792 (D. Minn. Jan. 12, 2023).

A federal court in New Jersey has denied a franchisor’s motion for summary judgment on its claim for breach of contract by its franchisee, finding that the franchisee raised issues of material fact regarding whether it had been fraudulently induced to sign its franchise agreement based on an oral promise. Travelodge Hotels, Inc. v. Durga, LLC, 2023 WL 314313 (D.N.J. Jan. 19, 2023).

A federal court in Massachusetts has denied a franchisor’s summary judgment motion which sought attorneys’ fees related its defense of previously dismissed claims. Patel v. 7-Eleven, 2023 WL 35357 (D. Mass Jan. 4, 2023).