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New Jersey Federal Court Holds That Forum Selection Clause Does Not Bar Right to Seek Transfer to More Conveniant Forum

In Travelodge Hotels, Inc. v. Perry Developers, Inc., 2011 U.S. Dist. LEXIS 134478 (D.N.J. Nov. 22, 2011), Travelodge filed suit in New Jersey federal district court pursuant to a non-exclusive forum selection clause contained in the license agreement with its terminated licensee. In response to the lawsuit, the licensee moved to transfer the case to the Eastern District of Missouri, where its hotel was located. In opposing the transfer, Travelodge argued that the licensee waived its right to seek a transfer based upon convenience by agreeing to the forum selection clause in the license agreement. The court rejected Travelodge’s argument and held that where a forum selection clause is permissive, and not mandatory, the clause does not amount to a waiver of a party’s right to seek a transfer. After conducting a full analysis of all relevant factors, the court determined that considerations of fairness and convenience, as well as the interests of justice, weighed in favor of transferring the case.

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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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