March 30, 2026|Franchise Frontlines
March 30, 2026 | U.S. District Court for the Southern District of Ohio | Judge Algenon L. Marbley | Unpublished Opinion
Executive Summary
In an unpublished decision, Judge Algenon L. Marbley of the Southern District of Ohio denied a franchisee’s motion to dismiss for lack of personal jurisdiction in a Trafficking Victims Protection Reauthorization Act (“TVPRA”) case arising from alleged sex trafficking at a franchised hotel. The plaintiff alleged that she was trafficked at a Red Roof Inn operated by a franchisee in South Carolina and that both the franchisee and franchisor entities knowingly benefited from the trafficking venture. The franchisee argued that it lacked sufficient contacts with Ohio, where the franchisor entities are headquartered. The court disagreed, finding that the franchisee’s deliberate relationship with the Ohio-based franchisor, combined with its alleged transmission of operational and customer data to Ohio, was sufficient to establish specific personal jurisdiction. The decision reflects a continued expansion of how courts analyze franchise relationships, operational integration, and data flows in the context of TVPRA claims.
Relevant Background
The plaintiff alleged that she was trafficked over a multi-year period at a Red Roof Inn located in South Carolina that was operated by a franchisee. According to the complaint, the trafficking activity occurred repeatedly and involved numerous visible indicators, including frequent cash payments, high foot traffic to rooms, and prolonged stays under suspicious circumstances. The plaintiff further alleged that hotel staff observed or should have observed these conditions but failed to intervene.
In addition to suing the franchisee that operated the hotel, the plaintiff brought claims against several Red Roof franchisor entities headquartered in Ohio. The complaint alleged that the franchisor maintained centralized control over key aspects of hotel operations, including reservation systems, payment processing, policies, and training, and that franchisees were required to comply with system standards and transmit operational data to the franchisor.
The franchisee moved to dismiss the claims against it for lack of personal jurisdiction, arguing that it operated solely in South Carolina and lacked sufficient contacts with Ohio. The plaintiff opposed the motion, contending that the franchise relationship and related operational ties created meaningful connections with Ohio sufficient to support jurisdiction.
Decision
The court focused on whether it could exercise specific personal jurisdiction over the franchisee consistent with due process. Applying the Sixth Circuit’s framework, the court analyzed whether the franchisee purposefully availed itself of the forum, whether the claims arose out of those contacts, and whether exercising jurisdiction would be reasonable.
On the issue of purposeful availment, the court emphasized that the franchisee had affirmatively sought and entered into a long-term franchise relationship with an Ohio-based franchisor. That relationship required ongoing interaction with Ohio, including payments, reporting obligations, and compliance with franchisor-mandated systems and policies. The court noted that parties who create continuing relationships with entities in another state may reasonably be subject to jurisdiction there.
The court did not rest its analysis solely on the existence of the franchise agreement. Instead, it highlighted allegations that the franchisee transmitted operational and customer-related data—including Wi-Fi usage data—to the franchisor in Ohio as part of its regular business operations. According to the complaint, that data included information tied to the trafficking activity, such as the use of internet services to advertise commercial sex acts. The court concluded that these alleged data transmissions, directed to Ohio in the course of an ongoing business relationship, were sufficient to establish purposeful availment, particularly where they were directly related to the plaintiff’s claims.
Turning to whether the claims arose from the franchisee’s contacts with Ohio, the court applied a relatively lenient standard and found that the alleged conduct was sufficiently connected. The plaintiff’s TVPRA claim was premised in part on the theory that the defendants knowingly benefited from participation in a trafficking venture. The court determined that the franchisee’s integration into the franchisor’s systems—including reservation, payment, and data-sharing structures—was intertwined with the alleged conduct and therefore satisfied the relatedness requirement.
The court acknowledged that other courts have reached differing conclusions in similar cases involving hotel franchise systems. Some courts have declined to exercise jurisdiction over out-of-state franchisees where the alleged contacts with the forum consisted primarily of franchise agreements and general operational ties. However, the court distinguished those cases based on the additional allegations here involving the transmission of specific data to the franchisor’s forum. That distinction was sufficient, at the pleading stage, to support jurisdiction.
Finally, the court concluded that exercising jurisdiction was reasonable. The franchisee had voluntarily entered into a business relationship with an Ohio-based franchisor and could reasonably anticipate being subject to litigation there, particularly where the claims related to that relationship. The presence of the franchisor defendants in Ohio and the forum’s interest in adjudicating claims involving entities headquartered there further supported the exercise of jurisdiction.
Looking Forward
This decision continues a broader trend in TVPRA litigation targeting hotel systems and underscores how franchise relationships may shape jurisdictional and liability analyses. For franchisors, the opinion illustrates how courts may look beyond formal corporate separateness and focus instead on the practical realities of system operations, including data flows, centralized platforms, and ongoing operational oversight.
The court’s emphasis on data transmission is particularly notable. Modern franchise systems often rely on centralized technology platforms for reservations, payments, and customer analytics. This decision suggests that those systems—while operationally efficient—may also be cited as a basis for establishing connections between franchisees and a franchisor’s home forum. While the opinion arises in the jurisdictional context, the same facts are often invoked in arguments concerning control, participation in a venture, or system-wide knowledge.
The decision also highlights the importance of carefully structuring and documenting the allocation of responsibilities within a franchise system. Courts may examine how policies are developed, implemented, and enforced, as well as how information is shared across the system. Where allegations tie those elements to underlying misconduct, plaintiffs may attempt to characterize routine system features as part of a broader operational framework supporting liability.
At the same time, the opinion reflects a fact-specific analysis at the pleading stage. The court repeatedly emphasized that it was accepting the plaintiff’s allegations as true and applying a relatively low threshold for establishing jurisdiction. Future rulings—particularly at summary judgment—may further refine how these issues are evaluated.
For franchisors and operators in hospitality and other customer-facing industries, the case reinforces the need to evaluate system standards, training protocols, and reporting mechanisms in light of evolving litigation theories. As courts continue to address TVPRA claims in the franchise context, the interaction between brand standards, operational systems, and legal exposure will remain a central issue.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
