Franchise Litigation

Franchise Litigation

We represent franchisors in all areas of litigation regarding their businesses. Our extensive background includes in-depth knowledge of the disputes, legal issues, and contractual provisions that are specific to franchise systems – and we have a broad base of experience in successfully litigating these issues.

Our Services

We represent franchisors in a variety of litigation cases:

  • Franchisee litigation: enforcing the obligations of their franchisees, including intellectual property protection, quality control maintenance, royalty payment, enforcement of non-competition restrictions and compliance with the franchise system; defending franchisors against franchisee claims regarding the sale and performance of the franchise; contractual and non-contractual disputes, including franchisee class action suits
  • Consumer litigation: defending against consumer claims from both franchisee and company-owned stores, including class action and warranty claims
  • Employee litigation: defending against claims brought by company store employees, as well as by franchisee employees asserting co-employer relationships with the franchisor
  • Supplier/real estate litigation: commercial litigation involving suppliers, landlords and service providers

Our Clients

Our franchisor clients include retail sellers of goods and services like pets, drugs and other retail goods, food products, and extended automobile service warranties, as well as franchisors of intellectual property and business models and concepts. Examples of our successful litigation representation of franchisors include the following:

  • Defeated class certification against franchisor in a national putative class action lawsuit on behalf of consumers alleging RICO, fraud and various state consumer sales practices act violations
  • Defeated class certification in a national putative franchisee class action alleging RICO, fraud and antitrust violations in connection with various supplier incentive arrangements and alleged sole source supplier requirements
  • Successfully defended franchisor in injunction litigation initiated by franchisee claiming its exclusive territory was violated
  • Successful enforcement of franchisor’s non-competition restrictions and intellectual property rights to force closure of out-of-state franchisee’s store (following issuance of injunction in federal court in Ohio, successful litigation in bankruptcy court in franchisee’s home state to enforce injunctive relief notwithstanding the automatic stay)
  • Various successful injunction lawsuits on behalf of franchisor to close franchisee stores for failure to pay royalties and other obligations
  • Successful defense of franchisor in lawsuit brought by area developer concerning store performance, as well as advertising, support and lead referral obligations relating to area representation agreement
  • Successful defense of franchisor against maximum retail price fixing claim (prior to the Khan Oil decision)
  • Summary judgment for international retail franchisor with respect to discrimination claims asserted by regional store manager
  • Successful resolution of various lawsuits alleging co-lessee and/or guarantor obligations of franchisor with respect to store leases
  • Successful representation of multi-unit franchisee in defense of FLSA collective action, including de-certification of collective action

People

Robert Cohen

Director + Co-Chair, Litigation Practice

614-462-5492Email
Nicholas S. Bobb

Director + Co-Chair, Litigation Practice

614-462-5414Email
Loriann E. Fuhrer

Director

614-462-5474Email
Tamara Tackett

Paralegal

614-255-5505Email

Experience

No results found.

Publications + Presentations

publication

Ohio’s Revised LLC Act - What You Need to Know

Article

Why Franchise Businesses Should Be Re-Evaluating Their “No-Poach” Provisions

publication

5 Recommendations for Universities Facing Tuition Refund Class Action Suits

Smart Summary If your college or university sees a class action suit as a result of COVID-19, contract terms, including language of any force majeure clauses, will be critical.In addition to contract-based defenses, colleges + universities may look to procedural defenses and common law defenses like “impossibility” and “frustration of purpose.”Universities will want to think through their refund and future service credit offerings to try to minimize claims and any potential damages. In the wake of colleges and universities across the country turning to distance learning to minimize the spread of COVID-19, it is no surprise that putative class action complaints are now being filed seeking refunds and discounts on tuition and other fees paid by students. By now, you likely already know that cases have been filed against Purdue University, the University of Miami, Drexel University, and the Boards of Regents of both the University of Colorado and the University of Arizona. A number of these suits have been brought by the same law firm, which is attempting to attract new cases through its website “CollegeRefund2020.com.”Some of the suits seek reimbursement of a portion of paid tuition, based on the theory that the students contracted for an on-campus educational experience, which has not been provided. Other suits seek reimbursement of a portion of paid housing, meal plan expenses, and/or other service fees relating to athletic facilities, medical services or other amenities.For in-house counsel at universities across the country who are pondering whether their institution will be the next target of these lawsuits, we’ve outlined five key questions you should be considering if (and even before) your institution is sued.What are the contract terms? The claims being filed are predominantly contract claims, so the specific language of your institution’s contractual relationships with its students will be important. The applicable terms may specifically address refunds, school closures, and emergency circumstances. Is “force majeure” a defense? You and your outside counsel should consider whether there are any contractual force majeure provisions that may relieve performance in the event of some unforeseeable circumstance like a nationwide pandemic. Again, the specific language of your force majeure provision is important.Are there common law defenses? Even if the contractual language at issue does not contain a force majeure provision, certain common law defenses may be available, depending upon the jurisdiction in which any suit is brought and the applicable law. Common law principles of “impossibility” and “frustration of purpose” can, under some circumstances, provide a defense.Are there procedural defenses? In addition to contract-based defenses, procedural defenses may also be available to you. An institution that has been sued will want to consider: whether personal jurisdiction exists in the jurisdiction in which the suit has been brought; whether the named plaintiff is an appropriate representative of the putative class; how the class or classes have been defined; and whether the traditional legal requirements for each claim have been met. Unjust enrichment claims are included in several of the early cases. The law of most states holds that claims for breach of contract and unjust enrichment are mutually exclusive, although many states allow plaintiffs to plead both, subject to later proof and/or choice of remedy.What can be done to minimize claims and potential damages? The relevant facts vary from university to university. Some universities have allowed students to remain in student housing and to continue to receive meals pursuant to their meal plan, while other universities have ceased housing and cafeteria operations entirely. Some universities have offered refunds or partial refunds, while others have not. Ensuring students stay on track to receive course credits toward graduation during periods of necessary distance learning will help to mitigate potential damages. Institutions that think creatively and take steps to introduce new ways of fostering community engagement and mentorship that would otherwise take place in residence halls will also be in a better position to defend tuition claims. For example, if a student took History 101 during the mandated period of distance learning, allowing him or her the option to re-take the class in-person once school resumes may be a productive way to mitigate potential damages. Similar options may exist for meal, athletic and health services. However, similar options may not exist with respect to housing availability. While closure decisions may already have been made, universities will want to think through their refund and future service credit offerings to try to minimize claims and any potential damages.No matter the course of action you choose, college and university counsel should be in close communication with their outside counsel partners, in particular those with substantial class action experience. Discussing these and other potential defense strategies can give your institution a head start on any litigation that may be headed your way.Vinita Mehra is a director and chair of Kegler Brown’s Global Education practice group, and works with college and university clients across the country on their operational and strategic planning issues. She can be reached directly at vmehra@keglerbrown.com or (614) 255-5518.Lori Fuhrer and Robert Cohen are directors and experienced trial lawyers in Kegler Brown’s Class + Collective Action practice, where they defend clients in contract and class action litigation of all kinds.Fuhrer can be reached directly at lfuhrer@keglerbrown.com or (614) 462-5474.Cohen can be reached directly at rcohen@keglerbrown.com or (614) 462-5492. 

publication

Winning at Trial

On November 20, Tom spoke during a one-day trial advocacy seminar featuring several of Ohio’s leading trial lawyers. Attendees were taken through the trial process, gaining insight on tactics and strategies leading up to and during trial. Topics discussed also included approaches to pre-trial discovery, preparing for trial, jury selection, opening statements, direct and cross examinations, and closing arguments. Tom spoke on cross examinations, giving step-by-step guidance on preparing questions and emphasizing the importance of organization. 

OSBA webinar cosponsored by the ACTL
publication

The Art of Witness Preparation

On August 9, 2019, Tom presented to the Legal Aid Society of Columbus on the oft-overlooked topic of teaching witnesses to be witnesses. While most educational programming for lawyers focuses on what they must do in a courtroom, little guidance is provided for preparing witnesses, who are speaking in an alien environment and are often frightened and uncertain. Focusing on a witness’s role in persuading a jury, Tom described to attendees how to work with a witness to tell a story using organized, open-ended questions that allow the witness to comfortably tell their portion of the truth. He discussed preparing for direct and cross-examination, as well as the importance of not over-preparing. 

Legal Aid Society of Columbus
Article

So You Want to Own a Franchise? 3 Keys to Protecting Yourself

Co-written by Camren Williams, a 2015 Summer Intern at Kegler Brown and Ohio State University student-athlete (football). Many people think buying into a franchise system is an easy way to own a business; after all, you aren’t starting a business from scratch, you’re just operating some else’s proven system. Unfortunately, finding success as a franchisee can be difficult since there are so many variables that contribute to success or failure. Especially in the case of busy high-net-worth individuals, including professional athletes, starting a new franchise venture can be exceptionally challenging simply because of their lack of time and industry expertise. While the combination of time constraints, lack of industry expertise, and ever-changing variables can be daunting, there are three critical, foundational steps each prospective franchisee must first take to have a chance at becoming successful. #1 Never Go It Alone As with other aspects of professional life, establishing a qualified team is imperative. Many athletes believe that, because the franchised business is already a recognized brand, all they need to do is invest their money in order to launch and the rest will work itself out. In reality, launching a franchise requires a franchisee to play an active role in selecting a location, constructing the space, hiring staff and management, and negotiating an array of vendor services, among other necessary activities. Forging a team of experienced advisors can help protect athletes from getting taken advantage of at every turn. One great example of this approach is Keyshawn Johnson. More than ten years ago, the former #1 overall pick in the 1996 NFL draft founded his company, First Picks Management, by teaming up with more than a dozen professional athletes as investors. A significant element of the group’s success, however, was partnering with Glenn and Clarence Mah, business executives and award-winning foodservice and hospitality experts, and Ingrid Roberts, a business development and marketing expert. This team has been very successful in the food industry where Johnson has opened numerous Panera Bread restaurants and Cold Stone Creamery ice cream parlors. This team of highly qualified individuals performs research and analysis within the food industry to ensure the overall team is protected and equipped with the proper advice and guidance, which then translates to operational success for each franchised business owned by First Picks Management. #2 Investigate the Franchise Prospective franchise owners must investigate not only the brand equity inherent in a franchise opportunity, but also the franchise’s potential for profit and the support the franchise system will provide. Every franchisee’s goal is to expand and capitalize on a pre-existing business system to generate greater profitability than an independent start-up business could likely achieve. Understanding how the franchisor supports the franchisee through training, marketing, leadership development, financial systems, and overall support is a critical component of success. It’s also very important to understand the experience of other franchisees in that franchise system. Are they successful? Do they enjoy being a franchisee? What are the challenges they’ve faced? #3 Understand + Leverage Brand Equity Before fully committing to a franchise, athletes must thoroughly understand the extent and reach of its brand equity. While leveraging a franchise with a highly recognizable brand can provide great opportunities for success, awareness only within in a certain geographic region, for example, may not translate to another market. And though it could provide a unique opportunity for a franchisee to introduce the brand to a new market, it might also be a concept that isn’t well received within that area for a variety of reasons. Without the ability to leverage geographical brand relevance, franchisees are essentially in the same position startup entrepreneurs. Bottom line: franchising can be a much more challenging investment than many people think. Money alone does not lead to success in the franchise world and in order to have a chance at sustained success, franchisees need to build a qualified team, investigate the franchise and determine how best to leverage a brand’s identity.

Presentation

Legal Aspects of Franchising

Franchising attorney Kacie Davis gave this presentation to students at The Ohio State University Fisher College of Business.The information in this presentation includes: the legal aspects of franchising, state and federal franchise compliance, regulatory exemptions and exclusions and best practices with respect to disclosure, negotiation and operations.

Firm Highlights