The Franchise Memorandum

In an unpublished opinion, a Utah appellate court affirmed the enforcement of a settlement agreement related to a dispute over a terminated franchise agreement.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). Following termination, a subsequent lawsuit, and mediation, franchisor G6 offered and franchisee Park Property accepted a “walk-away” resolution to the dispute, with each party to relinquish all claims against the other. Although certain disputes arose in the course of finalizing the settlement, the parties ultimately agreed to terms and Park Property indicated it would sign a written agreement. However, Park Property ultimately refused to sign the final draft of the settlement agreement without explanation, and G6 sued to enforce the settlement. The district court found that oral and email confirmation of the agreement’s terms constituted a binding agreement and ordered the parties to sign the latest version of the agreement. Park Property appealed, asserting that the parties did not intend to assume legal obligations before signing a written agreement. Park Property also argued that it was inappropriate for the parties to sign the latest version of the agreement, because it contained terms that had been negotiated after the oral and email confirmations.

The appellate court affirmed the district court’s decision that an enforceable agreement existed between the parties. It held that, at the time of the oral and email acceptances, the parties made no counterproposals on terms and there was no indication that the parties’ agreement was contingent on any future events. The court further concluded that the district court’s order that the parties sign the final version of the agreement was appropriate, as there was no evidence in the record at the time of the order showing that version to be inconsistent with the terms to which the parties had agreed. Although Park Property subsequently presented such evidence, the appellate court held that it thereby failed to raise a timely objection to the order.