David J. Kaufmann Franchise Case Law Developments
In this edition of his Franchising column, David J. Kaufmann explores recent decisions in the field, touching on issues from broker liability for fraud in New York, to questions of vicarious liability.
December 23, 2020 at 12:30 PM
11 minute read
Franchise Broker, Independent of Its Client Franchisor, May Be Held Liable for New York Franchise Act Fraud Claims. In a stunning development, a Minnesota federal court magistrate recommended in seven cases involving the same franchisor—and the court adopted the recommendations—that a franchise broker may be held liable for New York Franchise Act fraud claims related to the broker's franchise sales activities on behalf of franchisor I Love Kickboxing (ILKB) (The defendant franchise broker was also deemed possibly liable for violations of the Minnesota Franchise Act.) Golden Polar Bear v. FranChoice, No. 19-CV-484 (MJD/ECW) (D. Minn. 2019), report and rec. adopted, No. 19-CV-484 MJD/ECW (D. Minn. 2020); Rise Above Fitness v. FranChoice, No. 19-CV-1435 (MJD/ECW) (D. Minn. 2019), report and rec. adopted as modified, No. CV 19-1435 (MJD/ECW) (D. Minn. 2020); Johnson v. FranChoice, No. 19-CV-1417 (MJD/ECW) (D. Minn. 2019), report and rec. adopted, No. CV 19-1417 (MJD/ECW) (D. Minn. 2020); Xiaolin Li v. FranChoice, No. 19-CV-1267 (MJD/ECW) (D. Minn. 2019), report and rec. adopted, No. CV 19-1267 (MJD/ECW) (D. Minn. 2020); Hamilton v. FranChoice, No. 19-CV-1426 (MJD/ECW) (D. Minn. 2019), report and rec. adopted, No. CV 19-1426 (MJD/ECW) (D. Minn. 2020); Orange Rabbit v. Franchoice, No. 19-CV-687 (MJD/ECW) (D. Minn. 2019), report and rec. adopted, No. CV 19-687 (MJD/ECW) (D. Minn. 2020); and Hasko v. FranChoice, No. 19-CV-702 (MJD/ECW) (D. Minn. Dec. 19, 2019), report and rec. adopted, No. CV 19-702 (MJD/ECW) (D. Minn. 2020).
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