Michigan Federal Court Grants Summary Judgment Enforcing Franchise Agreement Termination and Awarding Liquidated Damages and Attorneys’ Fees

A federal court in Michigan granted Little Caesar Pizza Enterprises, Inc.’s motion for summary judgment seeking to enforce its termination of the franchise agreements between it and franchisee S&S Pizza Enterprises, Inc. Little Caesar Enters., Inc. v. S&S Pizza Enters., Inc., 2023 WL 5489021 (E.D. Mich. Aug. 24, 2023). Little Caesar’s moved for summary judgment on is claim for breach of contract based on S&S’s repeated defaults under its two franchise agreements, including the failure to provide required financial statements, abandonment of one of the franchised locations without approval, failure to make royalty and advertising payments, and eviction from one of the leased restaurant locations. The court found that Little Caesar put forth sufficient evidence that a “plethora” of breaches of the clear and unambiguous terms of the franchise agreements, and S&S’s failure to cure the curable defaults despite receiving an opportunity to do so, constituted good cause for termination. The court further found that provisions in the franchise agreement allowing for liquidated damages in the event of early termination based on the franchisee’s default and reasonable attorneys’ fees associated with the enforcement of the termination were valid and enforceable. Lathrop GPM represented Little Caesar in this case.