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Washington State Investigating Use of No-Poaching Provisions in Franchise Agreements

 
By Sawan Patel 

The State of Washington has started issuing Civil Investigative Demands (“CIDs”), requiring franchisors to provide information on their use of no-poaching provisions in Franchise Agreements. By the end of this year, if not sooner, all franchisors offering franchises in Washington, or having franchisees in Washington, should expect to receive a CID.

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Recent Litigation Developments: Arbitration, No-Poaching, and Post-Term Non-Competes


 


We noticed a few interesting cases this summer regarding the dismissal of no-poaching claims, the enforceability of arbitration agreements, and post-term covenants not to compete. In Ogden v. Little Caesar Enterprises, Inc., the U.S. District Court for the Eastern District of Michigan became the first federal court to grant a franchisor’s motion to dismiss claims alleging class injuries suffered by its franchise agreements’ no-poaching provisions. Campbell Investments, LLC v. Dickey's Barbecue Restaurants, Inc. shows that there are in fact limits to federal courts’ presumptive favor of arbitration agreements, namely, not signing the franchise agreement. Finally, AMV Holdings, LLC v. Am. Vapes, Inc. is a reminder of the importance of drafting non-compete provisions that are reasonable in geographic scope and duration because courts may be unwilling to apply the “blue pencil doctrine” to save them from being unenforceable.


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News 

Larkin Hoffman, led by Joe Fittante, represented Self Esteem Brands in connection with its acquisition of The Bar Method, conducting due diligence related to franchise, intellectual property, and real estate matters. Larkin Hoffman attorneys also provided advice and counsel on the key terms of the definitive acquisition agreement. For more information about the transaction, click here. Larkin Hoffman has represented Self Esteem Brands and its affiliates in various matters over the years including providing franchise advice on their various fitness and wellness brands, Anytime Fitness, Basecamp Fitness, and Waxing the City.

In four out of the last six years, Best Lawyers® has selected a Larkin Hoffman attorney as the Minneapolis franchise law “Lawyer of the Year,” a recognition given to a single attorney in a designated practice and metropolitan area. In 2019, Chuck Modell was selected for a second consecutive year since 2018, following Joe Fittante in 2016, and Chuck again in 2014. Lawyers receiving this honor are selected based on particularly impressive voting averages received during the peer-review assessments.

Chuck Modell and Joe Fittante, as well as Jim Susag and Susan Tegt, were also named as 2019 Best Lawyers® in the area of Franchise Law. Best Lawyers® is the world’s most selective and highly-regarded directory of attorneys, and inclusion is based on an exhaustive and rigorous peer-review process comprised of evaluations by top attorneys. Larkin Hoffman attorneys were also selected as 2019 Best Lawyers® in the areas of Land Use & Zoning Law, Real Estate, Tax Law, and Litigation, among others.

The same cast was likewise selected to the 2019 Minnesota Super Lawyers List, with Chuck Modell, Joe Fittante, and Jim Susag, being recognized as Super Lawyers, and Susan Tegt, Henry Pfutzenreuter, and Sawan Patel as Rising Stars, all in the area of Franchise/Dealership. Super Lawyers annually rates outstanding lawyers in many practice areas based on peer recognition and professional achievement. Only a small percentage of practitioners in Minnesota are selected each year.

Events

Chuck Modell will be presenting a session titled, “A Comprehensive Legal Review of Creation of a Start-up Franchise System,” at the upcoming American Bar Association Forum on Franchising in Denver, Colorado, from October 16–18, 2019.

Larkin Hoffman will host its annual Women’s Networking Event on Thursday, September 19, 2019 from 5:30 to 8:30 p.m. at Allianz Field in St. Paul, Minnesota. In addition to drinks, hors d’oeuvres and lively discussion, tours of the stadium will be offered throughout the evening. If you are interested in attending this event, please email Bobbie Wicklow to RSVP. In addition, if you are interested in learning more about the event, or would like to be involved next year, you may contact Susan Tegt, the chair of the organizing committee, for more information.


Community 

Gala for the Benefit of Bridging

Larkin Hoffman will again be a sponsor of the Gala for the Benefit of Bridging, held at ‎the Hilton Minneapolis on October 11, 2019. Bridging, ‎Inc. is the largest non-profit furniture bank in the United States. Serving ‎the greater Twin Cities area, Bridging provides quality, donated furniture and household items to ‎people transitioning out of homelessness, poverty, and other difficult circumstances. Dan Kadlec, ‎a shareholder in Larkin Hoffman’s Corporate and Finance Group, serves as a member of Bridging’s board.‎    


Summer/Fall 2019


Our Professionals

 

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Charles Modell, CFE

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Joseph Fittante, Jr.

Mark Robertson

James Susag




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Susan Tegt

SawanPatel2018

Sawan Patel

Inga Schuchard

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Bryan Huntington

Henry Pfutzenreuter, editor

 

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Jill Henson


 


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Larkin Hoffman provides counsel to a wide variety of ‎organizations, from ‎small businesses and nonprofits to  Fortune 500 companies, in ‎many areas of practice including ‎corporate and governance matters, litigation, real ‎estate, government relations, labor and employment, intellectual property, ‎information technology, ‎franchising and taxation. The firm also serves the needs of individuals in many ‎areas ‎including trusts and estates, personal injury and family law.

 

This newsletter is provided as a service to our clients and firm associates. While the information provided in this newsletter is believed to be accurate, it is general in nature and should not be construed as legal advice.





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