ABSTRACT The Court of Appeals of Texas, Tenth District, in Cheyenne Partners, LLC v. Rainbow Int’l, LLC, 2026 Tex. App. LEXIS 2075 (Tex. App.—Waco Mar. 5, 2026), affirmed a trial court judgment enforcing Texas franchise agreements against a Michigan-based franchisee who failed to invoke Michigan’s franchise protections through proper procedural mechanisms. The appellate court held that the franchisee waived any choice-of-law issue by not filing a timely motion under Texas Rule of Evidence 202 requesting judicial notice of Michigan law, despite multiple alleged defaults under the franchise agreements. The court further found legally and factually sufficient evidence supporting breach of contract based on the franchisee’s failure to submit required reports, pay license fees, provide audited financial statements, and maintain the franchisor’s goodwill. The decision underscores the critical importance of procedural compliance when seeking application of foreign state law in Texas courts and clarifies that franchise agreement termination provisions permitting termination without notice for specific defaults will be enforced when those defaults are proven. CASE IDENTIFICATION AND PARTIES This case, Cheyenne Partners, LLC v. Rainbow Int’l, LLC, 2026 Tex. App. LEXIS 2075, was decided by the Court of Appeals of Texas, Tenth District, on March 5, 2026, on appeal from the 170th District Court of McLennan County, Texas. Rainbow International, LLC and The Grounds Guys, LLC served as appellees and franchisors, having sued to enforce franchise agreements governing two Rainbow restoration franchises in Monroe and Oakland, Michigan, and a Grounds Guys landscaping franchise. Cheyenne Partners, LLC, the franchisee entity, and Jason […]

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ABSTRACT In Derby Realty, LLC v. Macit, LLC, the Superior Court of Connecticut, Judicial District of Ansonia-Milford at Milford, denied a motion to dismiss in a summary process action, holding that a commissioned agent agreement for the sale of motor fuel did not constitute a franchise relationship under the Connecticut Petroleum Franchise Act. The court found that the parties expressly disclaimed any franchise relationship in their agreement and that the defendant lacked the entrepreneurial responsibility and ownership characteristics required to qualify as a retailer under the statute. The decision, rendered on March 26, 2026, relied heavily on the recent Connecticut Appellate Court decision in Branford Quick Mart, LLC v. Aldin Associates Ltd. Partnership and concluded that commissioned agents who sell motor fuel on behalf of property owners without purchasing, owning, or controlling the fuel are not entitled to the protections of the Petroleum Franchise Act. CASE IDENTIFICATION AND PARTIES This case, Derby Realty, LLC v. Macit, LLC, was decided on March 26, 2026, by the Superior Court of Connecticut, Judicial District of Ansonia-Milford at Milford. Derby Realty, LLC, the property owner, brought a summary process action against Macit, LLC, the commissioned agent, seeking possession of commercial property located at 208 New Haven Avenue in Derby, Connecticut. The commissioned agent moved to dismiss the action for lack of subject matter jurisdiction, arguing that its relationship with the property owner’s predecessor in interest, Alliance Energy, LLC, Global Partners LP, and Global Montello Group Corp., constituted a franchise relationship requiring sixty days’ written […]

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Abstract In Rise Line Business Credit, LLC v. Rodriguez, the United States District Court for the Southern District of Florida addressed whether a guarantor who was no longer employed by the borrower at the time the lender exercised its remedies had satisfied his contractual obligation to “fully cooperate and assist” the lender. The court granted partial summary judgment in favor of the lender on four affirmative defenses—estoppel, justification, failure to mitigate, and ratification—while denying summary judgment on waiver, consent/acquiescence, good faith, impossibility, and indefinite contract terms defenses. The decision turns on whether Rodriguez acted in good faith given his limited capacity after leaving the borrower’s employment, a question the court found presents genuine disputes of material fact requiring jury determination. Court and Parties The United States District Court for the Southern District of Florida issued its Report and Recommendation on June 24, 2026, in Rise Line Business Credit, LLC v. Rodriguez, Case No. Civ-BECERRA/TORRES, 2026 U.S. Dist. LEXIS 141299. Rise Line Business Credit, LLC, a Delaware limited liability company with its principal place of business in New York, is the plaintiff and lender. Robert Rodriguez, the defendant, served as chief executive officer of NPN Holdings LLC at the time he entered the conditional guarantee at issue. NPN Holdings LLC was the borrower under the loan agreement, and Rodriguez guaranteed certain obligations to Rise Line under a Conditional Guarantee executed contemporaneously with the loan. Factual Background In June 2018, Rise Line entered into a Loan and Security Agreement with NPN Holdings […]

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ABSTRACT The United States District Court for the District of New Hampshire denied a franchisee’s motion for partial summary judgment in a franchise disclosure dispute, finding that although the franchisor sold a franchise without providing the required Federal Trade Commission Franchise Disclosure Document in violation of both federal regulations and Florida’s Deceptive and Unfair Trade Practices Act, the franchisee failed to establish the remaining essential elements of causation and damages necessary for judgment as a matter of law. The court held that Florida substantive law governed the franchise formation dispute despite a contractual choice-of-law provision selecting New Hampshire law, reasoning that Florida’s consumer protection statutes applied to contract formation questions and that enforcing the choice-of-law clause to circumvent those protections would violate public policy. The decision clarifies that proving a per se statutory violation under FDUTPA does not eliminate the plaintiff’s burden to demonstrate detrimental reliance and quantifiable harm, and it reinforces that franchisors cannot use choiceof-law provisions to prospectively waive franchisees’ statutory disclosure rights. CASE IDENTIFICATION AND PARTIES This case, MI-BOX of North Florida, LLC v. MI-BOX Florida, LLC, was decided on March 25, 2026, by the United States District Court for the District of New Hampshire. MI-BOX of North Florida, LLC, the plaintiff and franchisee, sued MI-BOX Florida, LLC, the defendant and franchisor, alleging violations of Florida’s Deceptive and Unfair Trade Practices Act, fraudulent inducement, and seeking rescission of the parties’ Dealership Agreement. The case was originally filed in Florida state court, removed to the United States District […]

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ABSTRACT This case involves a franchise dispute between Home Instead, Inc. (franchisor) and twenty franchisees who alleged breach of a settlement agreement. The franchisees claimed they were entitled to early renewal of their franchise agreements under a March 2024 settlement, but Home Instead refused, arguing the settlement only applied to franchisees whose agreements expired before March 17, 2027. The United States District Court for the District of Nebraska granted Home Instead’s motion to dismiss in part, finding the settlement agreement’s plain language did not create early renewal rights for franchisees whose agreements expired after the three-year settlement period. The court rejected the franchisees’ arguments that the agreement was ambiguous and dismissed both breach of contract and breach of implied covenant claims. This decision reinforces the principle that courts will enforce unambiguous contract terms as written and will not create obligations beyond what the parties expressly agreed to in settlement agreements. CASE CAPTION AND COURT WJM Home Care, LLC v. Home Instead, Inc., 2026 U.S. Dist. LEXIS 72263, was decided on April 2, 2026, by the United States District Court for the District of Nebraska. Chief United States District Judge Robert F. Rossiter, Jr. presided over the case. The plaintiffs were twenty franchisees: WJM Home Care, LLC; EM Home Care, Inc.; Uzoma Care Corp.; Sanders Senior Care, Inc.; Diercks Senior Care, LLC; Weber Home Care Services, LLC; Solicitude, Inc.; Revere Care, Inc.; Buckskin 903 Ventures, LLC; GMW Solutions, LLC; RSGR, LLC; River Phoenix Health, LLC; Geocare, Inc.; Tailored Home Care, LLC; […]

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ABSTRACT This article examines Indo-Phili, Inc. v. Circle K Stores, Inc., decided by the United States District Court for the Central District of California on March 19, 2026. The case involved a petroleum franchise dispute under the Petroleum Marketing Practices Act (PMPA) where franchisee Indo-Phili challenged franchisor Circle K’s nonrenewal of their franchise relationship. Circle K issued a Notice of Nonrenewal after Indo-Phili failed to accept a renewal offer containing increased rent and higher gasoline volume requirements. The court granted summary judgment in favor of Circle K, finding that the franchisor complied with all PMPA requirements and that the nonrenewal based on the franchisee’s failure to agree to non-discriminatory rent increases was lawful. The decision reinforces franchisors’ flexibility to modify franchise terms at renewal and clarifies that contract extensions do not invalidate prior valid nonrenewal notices. This ruling has significant implications for the balance between protecting franchisees from arbitrary termination and preserving franchisors’ business flexibility. CASE CAPTION AND PARTIES Indo-Phili, Inc. v. Circle K Stores, Inc., 2026 U.S. Dist. LEXIS 63308 (C.D. Cal. March 19, 2026), involved Plaintiff and Counter-Defendant Indo-Phili, Inc. (franchisee), a California corporation operating service stations in Southern California, and Defendant and CounterClaimant Circle K Stores Inc. (franchisor), a Texas corporation operating convenience stores and gas stations throughout the United States and internationally. The case was decided by the Honorable John F. Walter, United States District Judge for the Central District of California. FACTUAL BACKGROUND Indo-Phili was a family business started by Sheikh Hassan Imam and his […]

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ABSTRACT The Minnesota Court of Appeals affirmed a district court’s grant of a temporary injunction in favor of Ellie Fam LLC, a Minnesota-based mental health clinic franchisor, against franchisees operating in Arizona and Nevada. The franchisees had attempted to terminate their franchise agreements citing Ellie’s alleged breaches and began operating independently under new names. Ellie sought enforcement of noncompete clauses in the franchise agreements. The appellate court applied the five-factor Dahlberg test and found that despite the district court determining the balance-of-harms factor favored the franchisees, the remaining four factors supported granting the temporary injunction. The court rejected franchisees’ arguments that substantial harm to them should bar the injunction, that their affirmative defenses precluded Ellie’s likelihood of success, and that arbitration clauses prevented injunctive relief. The decision emphasizes the importance of preserving contractual relationships pending full adjudication and demonstrates judicial willingness to enforce noncompete provisions in franchise agreements even when operational disputes exist. CASE IDENTIFICATION AND PARTIES This case, Ellie Fam LLC v. Coelho, 2026 Minn. App. Unpub. LEXIS 374, was decided by the Minnesota Court of Appeals on April 13, 2026. The case consolidated two appeals, A251515 and A25-1517, arising from Ramsey County District Court. Ellie Fam LLC served as respondent and franchisor, a Minnesota limited liability company that franchises mental-health clinics providing outpatient counseling and therapy services. The appellants and franchisees included Felipe Coelho and his company FKL Enterprises LLC, Allyson and Justin Fernstrom and their company AJ Southwest Ventures Inc., who operated Ellie clinics in Arizona, and […]

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ABSTRACT This article examines the United States District Court for the Western District of Texas’s April 16, 2026 preliminary approval of a $10.5 million class action settlement in In re F45 Training Holdings, Inc. Securities Litigation. The case involved allegations that F45 Training Holdings, Inc., a fitness franchisor, made materially false and misleading statements in its initial public offering materials and subsequent disclosures regarding franchise growth metrics, revenue recognition practices, and the sustainability of its business model. The court granted preliminary certification of the settlement class, approved the settlement as fair, reasonable, and adequate, established a notice program, and set a schedule for final approval proceedings. This decision has significant implications for securities litigation involving franchisors and demonstrates judicial willingness to approve settlements that provide meaningful recovery while avoiding the risks and costs of continued litigation. CASE CAPTION AND COURT In re F45 Training Holdings, Inc. Securities Litigation, No. 1:22-CV-1291-DAE, was decided by Senior United States District Judge David A. Ezra in the United States District Court for the Western District of Texas, Austin Division, on April 16, 2026. Lead Plaintiff Pledge Capital LLC and named Plaintiff Police and Fire Retirement System of the City of Detroit (collectively, Plaintiffs) brought claims against F45 Training Holdings, Inc. (Defendant and franchisor), along with individual defendants Adam Gilchrist, Michael Raymond, Darren Richman, Mark Wahlberg, Christopher E. Payne, controlling entity defendants MWIG LLC and Kennedy Lewis Management LLC, and underwriter defendants Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Robert W. Baird & […]

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Franchise networks and dealer networks both achieve scale by separating ownership from brand control and by distributing execution across many local businesses. Because the agreements that govern these networks cannot anticipate every future contingency and because both sides invest in assets that are highly specific to the relationship, the same disputes recur: territorial encroachment that is increasingly driven by centralized e‑commerce and delivery applications; disagreements over national advertising funds or cooperative marketing funds; frictions over vendor and parts rebates; price, termination, and renewal conflicts; and, in dealer systems in particular, disagreements over warranty reimbursement and the permissibility of direct‑to‑consumer sales models. These outcomes are not random or idiosyncratic. They are the predictable result of incomplete contracting, relationship‑specific investments, and multi‑dimensional performance that is difficult for a court to verify after the fact. A microeconomic governance lens—combining Transaction‑Cost Economics (TCE), which explains why parties choose particular governance structures, with the logic of relational contracts, which explains how repeated dealings can support credible informal promises, and a practical deterrence program—turns these ‘never‑ending problems’ into design choices about information, remedies, and the value of the future. Summary The purpose of this paper is to provide a practical governance playbook for both franchising systems (franchisors and franchisees) and dealer systems (manufacturers and dealers). The playbook is grounded in TCE, in the economics of relational contracts, and in a straightforward deterrence framework that rests on three pillars: better signals, verifiable sanctions, and a credible future. The aim is to reduce wrongdoing, litigation, and distrust by […]

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Abstract This article explains briefly and informally how a compact deterrence framework organizes conduct in franchising and analogous dealership channels. p·F ≥ G states that a deviation is unattractive when the expected penalty (probability times sanction) meets or exceeds the private gain, following Becker (1968). The analysis combines operational instrumentation, contractual fee architecture, and event‑triggered remedies into one explanatory model that travels cleanly between the outlet and the corporate center. Its practical value is less about punishment than about design: when evidence is a by‑product of normal operations and outcomes trigger on observable events, participants coordinate on compliance with fewer disputes. Although the literature often foregrounds franchisee non‑compliance, franchisor opportunism is under‑represented in published work and, in practice, is both more rampant and more difficult to detect and prove because it is embedded in policy decisions and paper processes. The article therefore places special weight on headquarters transparency and self‑executing remedies to restore symmetry in detectability and sanctions. By reframing familiar conflicts as tractable choices over gain (G), detection (p), and sanction (F), the framework converts diffuse debates into measurable decisions. Introduction This article offers a third‑party account of franchise behavior that uses an expected‑value inequality, rather than moral exhortation, to explain why deviations rise or fall. Actors compare the private gain from deviating G with the expected penalty p·F, and when the latter meets or exceeds the former, the shortcut no longer pays in expectation (Becker, 1968). While most case discussions dwell on unit‑level issues, many of the largest, […]

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