California Lawyers Association

Business Law Franchise Law Committee

Updates from the BLS Franchise Law Committee

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
The Court largely denied franchisor plaintiff and counter-defendant ReBath LLC’s motion to exclude the expert testimony of franchisee defendant and counter-plaintiff HD Solutions, LLC’s (“HDS”) damages expert. Read more
The Court denied plaintiff franchisor Kahala Franchising, LLC’s (“Kahala”) motion for preliminary injunction against defendant holdover Pinkberry frozen yogurt franchisee Real Faith, LLC (“Real Faith”) primarily on the basis that Real Faith overcame Kahala’s rebuttable presumption of irreparable harm. Read more
The Court issued its findings of fact and conclusions of law after a nine-day bench trial. Plaintiff and franchisee Show Me Hospitality, LLC (“Show Me”) filed suit against franchisor and defendant Tim Hortons USA, Inc. Read more

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