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Cases, news, issues and legal opinions impacting franchise law

Judge Rules AAMCO Franchisee Did Not Violate 'Unduly Burdensome' Non-Compete Agreement

AAMCO Transmissions, photo by Blue MauMauPHILADELPHIA – A federal judge ruled this month that former Florida AAMCO franchisees did not violate their non-compete agreement when they left the franchising chain after 21 years and opened their own transmission shop under a new name 90 miles away.

Terminated Franchisee Beats the Odds, Sidesteps Injunction

In a recent decision by the United States District Court for the District of Colorado, the Court denied the plaintiff franchisor’s motion for a preliminary injunction, showing that, in rare situations, it is possible for a terminated franchisee to escape the lethal injunctive pincers of the Lanham Act, the federal law that is frequently relied upon by franchisors to shut down a franchisee’s operations during termination disputes.

Subway Settles, Will Ensure ‘Footlongs’ Are Foot Long

Subway sandwich photo by powerplantop
Photo by James

Does a class of sandwiches, the footlong, have to be a foot long or more? The answer, at least for Subway sandwiches, is that they soon will be, thanks to a settlement of a class action lawsuit that began with an Australian teenager in 2013.

Courts, Not Arbitrators, to Decide How Class Arbitration Is Governed

The U.S. Court of Appeals for the Third Circuit issued its "precedential opinion" last month stating district courts can make the decision as to whether arbitration clauses permit class action arbitration.

A Franchise Consultant’s Legal Nightmare

Chris Conner
Franchise Marketing Systems' president Chris Conner speaks on YouTube

GAINSVILLE, Georgia – Christopher Conner, founder and president of Franchise Marketing Systems, made a curious statement in 2012. He said, "Franchisees will sometimes sue; this is part of doing business." But he adds, "Or is it?" Conner sells himself as a veteran franchise consultant "who has been involved in several thousand business transactions without any lawsuits or litigation involved."

Franchisee's Fraudulent Misrepresentation Claims Dismissed because of Franchise Contract Disclaimer

CHICAGO - A district court in Illinois granted a franchisor's motion to permanently dismiss a franchisee's counterclaim that he was given bogus financials related to how much he could expect to make in purchasing a franchise.

Subway Franchisee Admits Bilking IRS of $1.5M

A multi-unit Subway franchisee in the Washington D.C. area pleaded guilty last week to conspiring to defraud the IRS of more than $1.5 million by under-reporting the money his sandwich stores were making.

California Court Orders Arbitration of Franchisee’s Employment Claims

A federal court in California granted last December a franchisor's motion to compel arbitration in a putative class action lawsuit filed by one of its franchisees. In Jacobson v. Snap-on Tools Co., Jacobson argued that his work was so closely regulated by Snap-on Tools, a franchisor of automotive and shop equipment, that he should be treated as an employee under California law, rather than as an independent franchisee.

In Minnesota It Takes the Wizard of Oz to Prove Franchisor Fraud

The United States District Court for the District of Minnesota on January 12, 2016, in Moxie Venture L.L.C., et al. v. The UPS Store, Inc., 2016 U.S. Dist. LEXIS 3603, hammered the final nail in the coffin of franchisee fraud claims under the Minnesota Franchise Act.

New York AG Settles with 96 Health Clubs over State Violations

NEW YORK – Attorney General Eric Schneiderman announced yesterday that his office has settled with almost 100 health clubs over various violations of state law as part of his ongoing investigation. The AG directed his comments not only to the fitness and health club owners but also to New York consumers.