Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Hotel franchisor alleges former franchisee owes past due fees, liquidated damages, (Feb 5, 2016)

By Michael Menzhuber, J.D., LL.M.

A former hotel franchisee breached its license agreement by failing to pay past due fees, according to a complaint filed by the franchisor in the federal district court in Minneapolis. The complaint also alleges that the former franchisee breached the parties’ termination agreement by failing to pay the termination payment and liquidated damages, as set out in that agreement (Park Hospitality LLC v. American Traders, Inc., February 3, 2016).

In October 2013, American Traders, Inc. (ATI) entered into a license agreement with Park Hospitality LLC (Park) to operate a Park Inn by Radisson guest lodging facility in Modesto, California. The license agreement provided, among other things, that: (1) Park could terminate the agreement if ATI failed to pay any past due fees; and (2) upon termination of the agreement, ATI would be required to pay Park all past due fees, as well as liquidated damages according to a calculation formula in the agreement.

Less than a year into operation of its Park Inn, ATI was in default of the license agreement for failing to pay due fees. After ATI failed to cure the default, Park and ATI entered into a written termination agreement with respect to the license agreement.

According the Park’s complaint, ATI agreed, under the terms of the termination agreement, to pay Park a termination fee and liquidated damages. However, despite its obligation to do, ATI has failed to pay Park the past due amounts.

Park’s three-count complaint for breach of license agreement and termination agreement seeks: (1) $128,399.52 in unpaid fees; (2) $91,727.98 for liquidated damages; (3) pre- and post-judgment interest; and (4) attorneys’ fees and costs.

The case is No: 0-16-cv-00257-PAM-FLM.

Attorneys: Craig P. Miller and Kirk W. Reilly (Gray, Plant, Mooty, Mooty & Bennett, P.A.) for Park Hospitality LLC.

Companies: Park Hospitality LLC; American Traders, Inc.

News: FranchisingDistribution MinnesotaNews