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|Ontario Court Stays Franchisees’ Class Action in Favour of Arbitration Clause in Franchise Agreement|
Meghan S. Bridges, Adam Ship; McCarthy Tétrault LLP;
April 7, 2015, previously published on January 30, 2015In 1146845 Ontario Ltd. v. Pillar to Post Inc., 2014 ONSC 7400, the Ontario Superior Court of Justice stayed a class action brought by plaintiff franchisees against the franchisor in favour of an arbitration clause in the franchise licensing agreement.
|Franchise Agreement Transfer Provisions|
Samantha Ahuja, Nelson F. Migdal; Greenberg Traurig, LLP;
March 26, 2015, previously published on March 16, 2015The number of hotels, particularly limited service hotels, operating under franchise agreements has exploded in recent years, and this trend is expected to continue in the near term. Franchise agreements, including those in the hospitality industry, are personal contracts for the benefit of the...
|Ontario Court of Appeal Again Narrowly Interprets the Resale Exemption in Ontario’s Franchise Legislation|
Brooke MacKenzie, Adam Ship; McCarthy Tétrault LLP;
March 25, 2015, previously published on March 23, 2015In its recent decision in 2147191 Ontario Inc. v. Springdale Pizza Depot Ltd., 2015 ONCA 116, the Ontario Court of Appeal upheld a finding on summary judgment that a franchisor could not rely on the “resale exemption” from the disclosure requirements found in Ontario’s franchise...
|Ontario Court Rejects Franchise Class Action Settlement Agreement for Overbroad Release|
Adam Ship, Chantal C. Tremblay, Jill Yates; McCarthy Tétrault LLP;
January 8, 2015, previously published on November 25, 2014In 2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corporation, the Ontario Superior Court of Justice recently dismissed a motion to approve a Settlement Agreement between the Franchisor and the Representative Franchisees on the basis of an overbroad unfair release.
|Ontario Superior Court Refunds Franchise Fee on the Basis of Frustration of Contract|
Brooke MacKenzie, Adam Ship, Thomas N.T. Sutton; McCarthy Tétrault LLP;
January 8, 2015, previously published on October 15, 2014The Ontario Superior Court recently affirmed a Small Claims Court decision returning a franchise fee to a franchisee where the franchise location contemplated was no longer available - in spite of a clause in the franchise agreement stating that the franchise fee “is under no circumstances...
|You're Gonna Have to Do More Than That: Passive Investment in California Limited Liability Company Insufficient to Meet Statutory Nexus Threshold|
Timothy A. Gustafson, Evan Hamme; Sutherland Asbill & Brennan LLP;
December 12, 2014, previously published on November 26, 2014A California Superior Court held that passive membership in a limited liability company (LLC) is insufficient to meet California’s statutory “doing business” standard. In Swart Enterprises, Inc. v. California Franchise Tax Board, an Iowa corporation with no business activities or...
|Get ready, Vietnam’s Restaurants Open To 100% Foreign Ownership!|
Manfred Otto; Duane Morris Vietnam LLC;
November 17, 2014, previously published on October 24, 2014Now is the time for international chains to position themselves. Beginning in January 2015, Vietnam’s restaurant business is open to 100 percent foreign ownership. Foreign-invested enterprises (“FIE”) may run their own production and internal logistics network free from...
|Hidden Trap in Confidentiality Provisions in Settlement Agreements Entered into by Franchisors|
Nicole J. Harrell, Stephen E. Story; Kaufman & Canoles A Professional Corporation;
November 13, 2014, previously published on January 2, 2014Franchisors entering into settlement agreements must be certain that the settlement agreements give the franchisor the right to make any disclosures required by the Franchise Disclosure Document (“FDD”), without breaching any confidentiality provisions in the settlement agreement.
|Governor Vetoes Proposed Changes to California Franchise Law|
Michael A. Bowen, Roberta F. Howell; Foley & Lardner LLP;
October 28, 2014, previously published on October 3, 2014To the surprise of many, California Governor Jerry Brown has vetoed the proposed changes to California’s franchise laws that were discussed in our Client Alert on August 28, 2014. In his veto message, Governor Brown criticized the bill’s substitution of “substantial and material...
|“Frustrating” Decision Highlights Alternate Approach to Rescission Claims|
Carly Cohen; Cassels Brock & Blackwell LLP;
October 14, 2014, previously published on October 8, 2014In the recent appeal of Dhillon v PM Management Systems Inc., an Ontario Superior Court judge upheld the decision of a Deputy Judge of the Small Claims Court, granting a franchisee’s claim for the return of an initial, non-refundable franchise fee.