I admit I was among the scores of franchise lawyers whose blood pressure skyrocketed with passage of California’s AB 5. If a Franchise Agreement establishes an independent contractor relationship between franchisor and franchisee, will the A-B-C test render the franchisor the employer of the franchisee? And if that’s the case, how is the franchisor
Tempnology: Rejection of Executory Contract is Not Rescission
The long awaited ruling in Mission Products Holding, Inc. v. Tempnology LLC (In re Tempnology) has simplified the intersection of bankruptcy and trademark law, with the court holding that rejection “constitutes a breach” of an executory contract and not an irrevocable termination of the contract.
Tempnology licensed clothing and accessories to Mission Products,
Durational Residency Requirements for Liquor Licensees: Closing Time?
Today, we welcome guest author Elizabeth G. Hodgson from our Exton, PA office. Elizabeth represents clients in a variety of industries, including food and beverage, Pennsylvania liquor licensing, startup and growth stage companies, hospitality, real estate, technology and financial services. Today, she describes how an upcoming ruling from the U.S. Supreme Court could impact the
The Franchisor is Liable for Franchisee’s Submission of Fraudulent Tax Statements?!
In Lomeli v. Jackson Hewitt, Inc., the United States District Court in the Central District of California held that the plaintiff, Luis Lomeli (“Lomeli”), had submitted enough evidence to hold the franchisor (“Jackson Hewitt”) vicariously liable for potential class actions due to a franchisee’s preparation and submission of fraudulent tax returns. The most concerning
Broad Provisions in Franchise Agreement: How Far is too Far?
The fight against joint employment of franchisors and franchisees took a small hit when the Western District of Pennsylvania (“Court”) chose to allow a franchisee’s employee’s suit to proceed. In Harris v. Midas, et. al., the plaintiff, Hannah Harris (“Harris”), convinced the Court that she had proffered enough evidence to allege a plausible basis
Drafting Matters: Do your non-competes bind the correct parties?
A federal court in Colorado recently upheld a franchisor’s non-competition provision despite that state’s strong public policy against non-competes. The franchisor prevailed due to its thoughtful contract drafting and ability to effectively communicate the unique nature of franchising to the court.
In-home care franchisor Homewatch International, Inc. and its franchisee, Prominent Home Care, Inc., signed
Successor Liability? Double-Check Those Assets!
The intersection of franchise law and general corporate law is extensive. A recent decision in the Michigan Court of Appeals (Court) highlights the importance of thoroughly understanding and considering the ramifications of transactions involving both spheres of law.
In Retail Works Funding LLC v. Tubby’s Sub Shops Inc. and JB Development LLC, the plaintiff
No Tip of the Hat to DOL Guidance
A recent decision by the Ninth Circuit Court of Appeals (Court) in Marsh v. J. Alexander’s throws a wrench into the equation with respect to the guidance on the tip-credit provision of the Fair Labor Standards Act (FLSA) promulgated by the Department of Labor (DOL).
25151637 – tip jar with british
Drafting Matters: When non-competes and renewal provisions collide
If a franchisor waives the non-compete provision in its current franchise agreement, can it enforce a non-compete when the franchise agreement is renewed? According to a recent decision by the 9th Circuit Court of Appeals, the answer is yes, and franchisors should consider a few key lessons from the decision. Robinson, DVM v. Charter Practices
Janitorial services franchisor cleans up on joint employer claim
Janitorial services franchisor Jan-Pro Franchising International, Inc. (“Jan-Pro”) is not the employer of its unit franchisees, according to a recent California federal court decision. Roman v. Jan-Pro Franchising Int’l, Inc., No. C 16-05961 WHA (N.D. Cal. May 24, 2017). The plaintiff franchisees failed to show that Jan-Pro exercised sufficient control over their day-to-day employment