In Red Lion Hotels Franchising, Inc. v. MAK LLC, 2010 U.S. Dist. LEXIS 23633 (E.D. Wash. Mar. 15, 2010), the court held that the Washington Franchise Investment Protection Act (“FIPA”) did not apply to a Washington-based franchisor in its dispute with a California franchisee, even though the franchise agreement contained a Washington choice of law provision. Franchisor Red Lion sued the franchisee for breaching the franchise agreement by failing to comply with a mandatory property improvement plan. The franchisee argued that the termination was improper and violated FIPA. Red Lion countered that FIPA was inapplicable because the franchisee was operating outside Washington. Instead, Red Lion asserted, the California Franchise Relations Act applied. The court applied Washington choice of law rules and held that FIPA was inapplicable because the relevant statutory provision demonstrated “a clear intent to limit the territorial scope of the Act to specific conduct that can be said to occur ‘in this state.’”
The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.
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.
RSS Feed