Franchising & Distribution Law Blog

Electric vehicle (EV) charging is now available at traditional motor fuel stations, as well as restaurants, parking garages, grocery chains, and banks.  With the increase of fully electric vehicles apparent in the news and on the streets and poised to grow exponentially, some franchisors are assessing incorporating EVs into their franchise systems.

New amendments to California franchising law broaden its regulations on franchisors. California Assembly Bill 676, signed by Governor Newsom on September 29, 2022, amends the California Franchise Relations Act (“CFRA”) and the California Franchise Investment Law (“CFIL”), which apply to the termination, nonrenewal, and transfer of franchises. The law’s sponsor, Assembly-member Chris Holden, claims the amendments to California franchise law will “rectify the unbalanced relationship between franchisee and franchisors.”

Dawn Johnson, Beata Krakus, Susan Meyer, Abby Risner, and Leonard Vines recently attended two virtual franchise programs – the International Franchise Association Annual Convention and the American Bar Association Forum on Franchising. 

In a case pending in the Northern District of Illinois, a court granted a motion to dismiss Petroleum Marketing Practices Act (PMPA) claims brought pertaining to two unbranded motor fuel stations. The court, however, refused to dismiss claims on the question of the validity of termination pursuant to the PMPA as to a third station. All three stations were supplied motor fuel by Lehigh Gas Wholesale, LP pursuant to supply agreements executed with each of the locations. One station sold Marathon-branded fuel and it was undisputed that the PMPA applied to that supply agreement. The two other stations were supplied unbranded motor fuel and did not have authorization to sell under any third-parties’ trademark.

After repeated delays, the compliance deadline for the Food and Drug Administration’s (FDA) new federal menu labeling rules — requiring disclosure of nutrition information for standard menu items — is set for May 7, 2018. After repeatedly being postponed, the FDA announced that the rules will not be postponed any longer and will be enforced as of that date.

The enforceability of class action waivers in arbitration provisions has been debated for years in courts across the country, including in several cases before the United States Supreme Court. This week, Congress weighed in on the ongoing debate. 

A recent decision in California highlights that retailers’ practice of collecting zip codes continues to be challenged. California’s Second District Court of Appeals affirmed summary judgment in a case brought as a class action against Chevron and other motor fuel retailers alleging violation of California’s Song-Beverly Credit Card Act for the collection of customers’ zip codes in conjunction with credit card transactions at gasoline stations.

Last month, the Fourth Circuit affirmed a ruling that North Carolina’s Ethanol Blending Statute is not preempted by the Petroleum Marketing Practices Act (“PMPA”) or federal renewable fuel program. The case was remanded for findings on whether the statute is preempted by the Lanham Act.

This month, Delaware passed a law to clarify that the franchisor/franchisee relationship is not an employment relationship. The law applies to relationships that are defined as a franchise under the Federal Trade Commission franchise rule.

As we previously discussed, some states - including Delaware now - are adopting legislation to clarify that franchises are independent contractors. These laws come in the wake of cases that find franchisees to have an employment relationship.

The bill that would have modified liquor franchise law in Missouri never made it out of the legislature. The bill, which we have followed in a number of blog posts, was passed in the House in the form of Senate Bill 114, but was never voted on in the Senate before the Missouri legislative session ended this month.