The Eleventh Circuit Court of Appeals recently upheld a settlement agreement between a franchisor and former franchisee that the franchisee alleged was obtained under the threat of criminal prosecution. Sewalk v. Valpak Direct Mktg. Sys., LLC, 2024 WL 767619 (11th Cir. Feb. 26, 2024).

In an unpublished opinion, a Utah appellate court affirmed the enforcement of a settlement agreement related to a dispute over a terminated franchise agreement. Park Prop. Mgmt. LLC v. G6 Hosp. Franchising LLC, 2022 WL 2165335 (Utah Ct. App. June 16, 2022).

A federal court in Missouri has granted in part a franchisee’s motion to enforce a settlement agreement and awarded the franchisee its attorneys’ fees as the “prevailing party.” Biologix Franchise Marketing Corp. v. Kay Logic, 2020 WL 33108 (E.D. Mo. Jan. 2, 2020). Biologix and its former franchisee, Kay Logic, entered into a settlement agreement whereby Kay Logic would make monthly installment payments to Biologix. A portion of each installment payment would serve as a credit toward the purchase of Biologix’s products, which Kay Logic was permitted to sell without ...

The Appellate Division of the New Jersey Superior Court recently held that a former Gulf Oil franchisee must comply with the terms of a settlement agreement and affirmed the denial of the franchisee’s motion to vacate the agreement. S&M Gulf Inc. v. Gulf Oil, LP, 2019 WL 333055 (N.J. Super. Ct. App. Div. Jan. 28, 2019). The dispute initially arose after the franchisee, Gulf Express, sued to enforce its right to purchase the franchise premises pursuant to a right of first refusal clause in its franchise agreement with Gulf Oil. The parties then entered into a settlement agreement ...

A federal court in the Northern District of Illinois ruled that a signed terms sheet between a settling franchisor and franchisee was an enforceable agreement under Illinois state law. Pinnacle Performance, Inc. v. Garbis, 2013 U.S. Dist. LEXIS 24433 (N.D. Ill. Feb. 21, 2013). This lawsuit began when the franchisor, Pinnacle Performance, filed suit against its former franchisees to enforce the covenant not to compete in the parties’ franchise separation agreement. Months into the litigation, the parties negotiated and signed a settlement terms sheet in a settlement ...

A Michigan federal court found a former franchisee in contempt of a court order after she failed to take affirmative steps to transfer the telephone number of her terminated franchise to the franchisor. In Allegra Network LLC v. Bagnall, 2012 U.S. Dist. LEXIS 48918 (E.D. Mich. Apr. 6, 2012), the franchisor filed a motion for preliminary injunction after learning that the franchisee was operating a competing printing business at the location at which it had previously operated its franchise. To settle that matter, the parties entered into a stipulated injunction in which the former ...

In Prosperity Systems, Inc. v. Ali, 2011 U.S. Dist. LEXIS 43884 (D. Md. Apr. 22, 2011), a Maryland federal court granted a franchisor’s motion to dismiss a franchisee’s counterclaim alleging that the franchisor breached a settlement agreement entered between the franchisor, franchisee, and other unrelated entities. That agreement granted Ali a PIZZA BOLI’S franchise and required franchisor PSI to insert language in the franchise agreement stating that it would treat Ali the same as all other franchisees. The agreement also required its signatories  to use their best ...

In Bath Junkie Branson, L.L.C. v. Bath Junkie, Inc., 2008 WL 2330749 (8th Cir. June 9, 2008), the Eighth Circuit Court of Appeals affirmed a federal court’s enforcement of the parties’ settlement agreement. Franchisor Bath Junkie, Inc. had appealed the district court’s decision to enforce a settlement agreement on the grounds that the court had erred in refusing to hold an evidentiary hearing as to whether there was a “meeting of the minds” on that settlement. Applicable case law provides for an evidentiary hearing when there is a dispute as to settlement. The Eighth ...