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Cases, news, issues and legal opinions impacting franchise law

New York Supreme Court Appellate Affirms Jan-Pro Cleaning Franchisee Is Employee of Sub-Franchisor

The Appellate Division of the New York Supreme Court has affirmed the rulings by the state's Unemployment Appeal Board that some of Jan-Pro Cleaning Systems franchisees were actually employees of the sub-franchisor, PD 10276, Inc., for unemployment tax purposes, and not independent contractors.

Franchisor McDonald’s to Settle with Franchisee’s 800 Workers in Wage-Theft Lawsuit, Paying $3.75M

McDonald's workersPresumably for the first time, McDonald's Corporation has agreed to settle claims that it was liable for labor law violations by a franchisee because it was a "joint employer" of the workers at five franchised restaurants in California.

Ex-Owner of Jreck Subs Pleads Guilty of Bilking Investors of $9.5M, Tax Evasion

U.S. Attny Hartunian (2nd from left) testifies before Judiciary Committee
(Photo: US Justice)

WATERTOWN, New York – The former owner of Jreck Subs, a 40-restaurant franchise chain founded in 1967, pled guilty Monday to defrauding investors and lenders of at least $9.5 million and to evading paying taxes to the United States government, through a promissory note scheme that was in operation from 2005 to 2015.

New York AG, DOL, Settle with 3-Store Papa John’s Franchisee for $500K

NEW YORK - Franchisees of three Papa John's Pizza restaurants settled with the New York Attorney General's office and the U.S. Department of Labor last month for $500,000 to reimburse more than 200 exploited workers for back wages they were owed.

Kentucky Appeals Court Finds Domino’s Not Vicariously Liable in Wrongful Death Suit

FRANKFORT – Kentucky's Court of Appeals affirmed last month the dismissal of a complaint filed against Domino's Pizza on a motion for summary judgment, in a vicarious liability lawsuit surrounding an attempted robbery at a franchisee's store, resulting in the shooting death of an employee's boyfriend.

The Predictably Unpredictable Legal Morass of Franchise Termination Damages

In franchise and antitrust distribution law there is no more exasperating, elusive and esoteric issue than damages. This analytical muddle threatens franchisors and franchisees alike. Further, the doctrinal failure regarding franchise damages is so robust that it has extensively infected damages theory, methodology, and calculation.

Commissioner Denies Registration for Media360, Orders Cease and Desist

LOS ANGELES – The California Department of Business Oversight Commissioner issued a cease and desist order in June against Media360 and its sole managing partner Reid S. Johnson for failing to disclose in its franchise registration document previous enforcement action against the franchisor from the U.S. Securities and Exchange Commission (SEC).

Maryland Finalizes Enforcement Action against Chris Conner, RedRhino

Chris Conner Image from YouTube video

BALTIMORE – As an update to the saga of Christopher J. Conner, the Office of the Attorney General of Maryland has finalized its consent order against the franchise consultant, his firm Franchise Marketing Systems, and client RedRhino epoxy floor company and its owner Michael Kenealy.

400 McDonald’s Workers Granted Class Status in Labor Violation Suit

McDonald's worker serving a customer (photo/bmm)

SAN FRANCISCO – A federal judge in California has granted class action certification for employees who worked at restaurants owned by a five-unit McDonald's franchisee, in a case alleging the company violated various labor laws.

McDonald’s Wins Trademark Dispute with Rival MacCoffee

STRASBOUG, France – A European court ruled on Tuesday that a Singapore company could no longer use its MacCoffee trademark or, for that matter, any other food or drink products with the prefix of "Mac" or "Mc."