Business Law Franchise Law Committee

Prepared by Michelle Emeterio An October 17, 2024 court order in JRUCW, Inc. v. Starbucks Corporation, No. CV 22- 7374-DMG (KSx), 2024 WL 5338586 (C.D. Cal. Oct. 17, 2024) granted defendant Starbuck’s Corporation’s motion for summary judgment on California Franchise Relations Act (“CFRA”) and related claims. Claims Plaintiffs JRUCW, Inc., JRUCW Pizza, Inc., and others (“Plaintiffs”) filed an action against Starbucks Corporation (“Starbucks”) in the Los Angeles County Superior Court on September 8, 2022, which was later removed to the… Read more

Prepared by Michelle Emeterio A November 12, 2024 court order in S.C. v. Hilton Franchise Holding LLC, No. 2:23-CV- 02037-APG-DJA, 2024 WL 4773981, at *1 (D. Nev. Nov. 12, 2024) denied defendant Hilton Franchise Holding’s motion to dismiss sex trafficking claims. Claims Plaintiff “S.C.” brought sex trafficking claims against Hilton Franchise Holding, LLC, hotel operators, and several individuals, alleging the defendants participated in or benefitted from sex trafficking S.C. at a Las Vegas hotel. The claims were brought under: The… Read more

In Meineke Franchisor SPV LLC v. CJGL, INC., No. 2:23-CV-00374, 2024 WL 4004998 (C.D. Cal. July 24, 2024), the Central District granted Meineke’s motion for summary judgement on each of defendant’s nine counterclaims. This is a cautionary tale for franchisee’s lawyers to plead all claims and to bring them early. BackgroundMeineke1 sublet the franchised premises to the franchisee, who ultimately vacated the premises after Meineke opted not to renew the master lease and the franchisee was unable to secure a… Read more

When presented with a valid arbitration agreement, district courts are permitted only to stay a case pending arbitration—they cannot simply dismiss the case and compel arbitration. Read more

In a trade secrets dispute between two franchisors of cookie stores, a federal judge has denied Crumbl, a Utah-based cookie-bakery chain, an injunction against one of its rivals that would have ordered the rival to open no new stores while the lawsuit remained active. Crumbl LLC v. Dirty Dough LLC, 2023 WL 5180370, at *1 (D. Utah Aug. 11, 2023).  Read more

A federal court in the Eastern District of California recently denied a subfranchisor’s motion to change venue to the Eastern District of New York, holding that its Operator Agreement was a franchise agreement under California law, thus making its forum-selection clause invalid under the California Franchise Relations Act (CFRA). Read more

Arbitration comes with significant risk.  Most arbitration decisions are not reviewable or appealable.  Even if an arbitrator makes a mistake in deciding a case, generally it cannot be appealed. Read more

The California Court of Appeal recently held that a patron of a Massage Envy franchise in San Rafael had not entered into a contract with franchisor Massage Envy (“MEF”) when assent to the contractual agreement was hidden in the franchisee’s General Consent electronic document.  Doe v. Massage Envy Franchising, No. A161688, 2022 Cal. App. LEXIS 1066 (Ct. App. Dec. 29, 2022) Read more

In a wage-and-hour misclassification action, the District Court, Judge Alsup, granted in part plaintiffs’ motion for class certification and motion for summary judgment on certain certified claims, finding Jan-Pro franchisees to be employees who had been misclassified as independent contractors. Read more

The Court granted in part and denied in part cross-motions for summary judgment between plaintiff-franchisee Full Tilt Boogie, LLC (“Full Tilt”), and defendants/franchisors KEP Fortune, LLC (“KEP”), Jeroen Bik, and Miray Bik (“the Biks”). Read more