The Franchise Memorandum

A Louisiana Federal court recently dismissed a complaint brought by Tesla against the Louisiana Automobile Dealers Association (LADA) and other associated dealerships and commissioners for various competition and constitutional claims stemming from Louisiana’s ban on direct sales of automobiles. Tesla, Inc. v. Louisiana Automobile Dealers Assoc., 2023 WL 4053438 (E.D. La. June 16, 2023).

A federal court in Tennessee determined that a binding contract existed between a sales representative and CWS Powder Coatings Company governing the percentage of commissions to be paid to the representative for sales to Premier, a CWS customer. The court also concluded, however, that there was no binding agreement requiring payment of commissions on sales to Carrier, a prospective customer at the time the alleged agreement was formed, who began purchasing from CWS nine years later. Reaves v. CWS Powder Coatings Co., No. 3:22-cv-0158 (M.D. Tenn. May 24, 2023).

The Fifth Circuit Court of Appeals affirmed a Texas federal court’s (i) dismissal of a distributor’s fraud claims against an automobile-product manufacturer and (ii) grant of summary judgment in favor of the manufacturer on the distributor’s breach of contract claim. Wesdem, LLC  v. Illinois Tool Works, Inc., 70 F.4th 285 (5th Cir. 2023).

The Fifth Circuit Court of Appeals recently affirmed a federal district court’s ruling in a breach of contract action brought by Shenzen Synergy Digital, a China based manufacturer and exporter, against Mingtel, a Texas based importer. Shenzen Synergy Digital Co., Ltd. v. Mingtel, Inc., 2023 WL 4573552 (5th Cir. July 18, 2023).

The California Court of Appeals for the Second District, creating a split of authority among California’s appellate courts, held that Ford Motor Co. did not have the right to enforce an arbitration provision in a sales contract between its dealership and a downstream purchaser. Montemayor v. Ford Motor Co., 92 Cal. App. 5th 958 (2023).

As part of Lathrop GPM’s Increasing Diversity in Franchising initiative, we have explored and conducted webinars on various facets of increasing diversity in franchising, including access to capital, educational initiatives that focus on business in general and franchising specifically, franchise issues for prospective franchisees, outreach through diverse professional organizations, and franchisor DEI goals and programs.  We now want to drill down and focus on individual franchisors and their brand-specific DEI initiatives. First up: Ben & Jerry’s.