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The Franchise Memorandum

The Franchise Memorandum

Posts in Personal Liability.

The United States District Court for the Northern District of Texas granted summary judgment to franchisor Jani-King Franchising, Inc. in a contract dispute it had with its regional franchisee in Great Britain, Jani-King GB Ltd. (“JKGB”), and JKGB’s majority shareholder and director, Ian Thomas (“Thomas”). Jani-King Franchising, Inc. v. Jani-King (GB) Ltd., 2017 WL 4758673 (N.D. Tex. Oct. 20, 2017). When the parties executed a franchise agreement to extend their existing relationship, Thomas signed a personal guaranty (governed by English law) promising to pay ...

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A federal court in Texas recently decided that a franchisor may recover on a guaranty agreement despite the guarantor's claim that the guaranty was unenforceable because he did not receive the value that he was allegedly promised in exchange for executing it. Burger King Europe GMBH v. Groenke, 2015 WL 6751121 (N.D. Tex. Nov. 5, 2015). Groenke had an ownership interest in multiple entities that owned and operated a number of Burger King franchises in and around Berlin, Germany. After the opening of insolvency proceedings for Groenke's entities, Burger King brought claims against ...

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In Free Green Can, LLC v. Green Recycling Enterprises, LLC, 2011  U.S. Dist. LEXIS 65132 (N.D. Ill. June 20, 2011), the federal district court for the Northern District of Illinois dismissed claims against an individual investor in the franchisor, refusing to pierce the corporate veil and find an individual personally liable as an alter ego. In 2009, Free Green Can (FGC), an Illinois-based franchisor of a recycling concept, entered into a franchise agreement with Green Recycling Enterprises (GRE), a Nebraska-based limited liability company. The parties’ relationship was ...

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In @Wireless Enterprises, Inc. v. AI Consulting, LLC, 2011 U.S. Dist. LEXIS 51973 (W.D.N.Y. May 16, 2011), a New York federal district court granted summary judgment in favor of the franchisor and its corporate officer dismissing the former franchisee’s counterclaims for breach of contract, breach of the covenant of good faith and fair dealing, actual fraud, constructive fraud, and tortious interference, among others. The franchisor had terminated the franchise agreement for a retail cell phone store and sued the franchisee for monies owed. The franchisee countersued based ...

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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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