Experience Details

Representation: Court Dismisses Franchisor’s CEO from Lawsuit Based on Plaintiffs’ Failure to State a Claim
Haynes and Boone Team: Coldwell, Deborah S., Gibson, Iris
Services: Franchise and Distribution, Franchise Litigation
July 2009

Description: A number of fitness center franchisees sued their franchisor Curves and its CEO Gary Heavin for fraudulent inducement and concealment, negligent misrepresentation and omission, breach of contract and alleged violations of the Texas Deceptive Trade Practices – Consumer Protection Act (DTPA). In an earlier ruling, the court dismissed the twenty-six of the franchisees’ thirty-one asserted claims in response to Curves’ and Heavin’s motion to dismiss. As a result, the sole claim remaining against the CEO was for alleged violations of the DTPA. Heavin moved to dismiss on the basis that the complaint failed to state a claim upon which relief could be granted. Heavin asserted that even if the allegations were true, the franchisees failed to adequately allege that he violated any provision of the Texas “little FTC Act.”

The Court ruled that the franchisees failed to allege that the CEO engaged in any false, misleading, or deceptive acts or practices. The Court dismissed the CEO from the case. Momentum Marketing Sales & Services, Inc. v. Curves Int’l, Inc., Business Franchise Guide (CCH), ¶14,215 (W.D. Tex. Jul. 28, 2009)