Foreign Shell Company is No Shield in Franchise Dispute

Posted on Blog September 16, 2015


A Florida federal judge has ruled that Hard Rock Cafe International must face a Bahamas-based franchisee’s suit claiming it exaggerated its profitability and demanded exorbitant royalties, finding the court has jurisdiction although the franchise agreement was executed by a foreign Hard Rock affiliate located in the Isle of Jersey, a known tax haven. Although the foreign affiliate might have an interest in the U.S. litigation, it is no shield to litigation in our courts because the ability to protect that interest is not impaired or impeded by its absence from the case. In other words, tax shelters do not necessarily prevent franchisees from enforcing their rights against franchisors in federal court.

HRCC Ltd. v. Hard Rock Café Int’l (USA), Inc., et al., M.D. Fla., Case No. 6:14-cv-02004-PGB-KRS.


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