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Tuesday, June 2, 2026

FRANCHISING & DISTRIBUTION—D.... - VitalLaw.com

Congruent with public policy, California caselaw did not suggest that an individual tortfeasor could be released from liability so long as a plaintiff could recover from a different tortfeasor.

A California statute invalidated franchise agreement liability-shifting provisions to the extent they would have absolved a natural person franchise promoter of liability for his own fraud, held the federal district court in Phoenix, Arizona. Most of the plaintiff yoga studio franchisees’ California Franchise Investment Law (CFIL) claims against the franchise promoter were time-barred. However, a CFIL § 31200 claim pertinent to material false statements had a one-year discovery limitation pursuant to CFIL § 31303. That one-year limit presented a traditional limitations period subject to tolling under the discovery rule. The court determined that whether it applied Arizona codified equitable tolling or California caselaw equitable tolling, the outcome was the same: the one-year limitations period was tolled in the time that the plaintiffs initially pursued their claims against the natural person defendant in California state court, which did not have jurisdiction over the defendant (Enlightened Armadillo Inc. v. Freeman, No. 2:25-cv-02663-JJT (D. Ariz. May 29, 2026)).

Background. Enlightened Armadillo, Inc. and Snug Holding Company, LLC, of Texas and Georgia respectively, complained about delays in opening Yoga Six -branded yoga studio franchises. They also complained of membership...



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