April 02, 2026|Franchise Frontlines
April 2, 2026 | Texas Court of Appeals, Beaumont | Memorandum Opinion
Executive Summary
In a mandamus proceeding, the Texas Court of Appeals conditionally granted relief in favor of franchisor Equity One Franchisors, LLC, holding that the trial court abused its discretion by refusing to enforce forum-selection clauses contained in a franchise agreement and related transfer documents. The dispute arose after former franchisees sought injunctive relief in Texas to block enforcement of noncompete and nonsolicitation provisions while avoiding the contractually designated Missouri forum. The franchisees argued that litigating in Missouri would be inconvenient and unjust. The franchisor maintained that the claims arose directly from the franchise agreements and must be litigated in Missouri. The appellate court agreed with the franchisor, concluding that the franchisees failed to meet their heavy burden to avoid enforcement of the forum-selection clauses and that the trial court improperly allowed the case to proceed in Texas.
Relevant Background
Equity One Franchisors, LLC operates a franchise system for independently owned insurance agencies. The franchisees entered into a franchise agreement in 2017 to operate under the GlobalGreen brand, followed by multiple subsequent agreements, including consents to transfer ownership interests and personal guarantees. Each of these agreements contained forum-selection clauses requiring franchisees to bring any claims arising out of or relating to the agreements in Missouri courts.
After restructuring ownership interests in 2025, one of the franchise principals exited the system and opened a competing insurance agency within the same geographic area. Equity One issued a cease-and-desist letter asserting violations of noncompete and nonsolicitation obligations, as well as potential misuse of confidential information.
Rather than litigating in Missouri, the franchisees filed an application in Texas state court seeking a temporary restraining order to prevent Equity One from enforcing its contractual rights. The trial court entered a broad ex parte TRO restricting the franchisor from enforcing noncompete provisions and from taking various actions related to the franchise relationship. Equity One moved to dismiss based on the forum-selection clauses, but the trial court denied the motion and extended the TRO.
Equity One then sought mandamus relief from the appellate court.
Decision
The appellate court concluded that the trial court abused its discretion by refusing to enforce the parties’ forum-selection clauses and by allowing the dispute to proceed in Texas.
The court first determined that the claims asserted by the franchisees arose directly from the franchise agreement and related transfer documents. Although the franchisees attempted to characterize their claims as extra-contractual, the court found that their request for injunctive relief was premised on preventing the franchisor from enforcing contractual rights, including noncompete and nonsolicitation provisions. As a result, the dispute fell squarely within the scope of the forum-selection clauses .
The court then addressed whether the franchisees met their burden to avoid enforcement of the clauses. Under Texas law, forum-selection clauses are presumptively enforceable, and the party opposing enforcement must show that enforcement would be unreasonable, unjust, or so inconvenient as to effectively deprive them of their day in court. The franchisees relied on arguments that litigating in Missouri would be costly, time-consuming, and disruptive to their business and family obligations.
The court rejected those arguments, explaining that such considerations are foreseeable at the time of contracting and are insufficient to overcome a bargained-for forum-selection provision. The court emphasized that general inconvenience, travel burdens, and increased litigation costs do not rise to the level required to invalidate a forum-selection clause. To hold otherwise would render such clauses effectively meaningless .
The court also rejected arguments that enforcing the clause would violate public policy or create inefficiencies by splitting related claims. It noted that the parties had expressly agreed to a specific forum and that courts must respect those contractual choices absent extraordinary circumstances.
Finally, the court held that the trial court erred in granting and extending injunctive relief before resolving the threshold issue of proper forum. By allowing the TRO to remain in place while declining to enforce the forum-selection clauses, the trial court permitted the franchisees to obtain substantive relief in a forum they had contractually waived.
Based on these conclusions, the appellate court conditionally granted mandamus relief and directed the trial court to dismiss the claims brought by the parties bound by the forum-selection clauses.
Looking Forward
This decision reinforces the strength and practical importance of forum-selection clauses in franchise agreements, particularly in disputes involving post-termination conduct and restrictive covenants. Courts continue to treat such provisions as binding commitments that define where disputes must be resolved, even when one party seeks to reframe the dispute through alternative claims or procedural strategies.
The case also highlights the risks associated with attempting to circumvent contractual forum provisions through injunctive relief in a more favorable jurisdiction. Courts are likely to look past the form of the pleading and focus on whether the underlying dispute arises from the agreement. Where it does, the forum-selection clause will generally control.
Equally important, the decision confirms that routine claims of inconvenience—such as travel burdens, business disruption, or the loss of preferred counsel—are insufficient to avoid enforcement. These are precisely the types of considerations parties are presumed to evaluate when entering into agreements that include forum-selection provisions.
At the same time, the opinion reflects a fact-specific application of settled principles rather than a departure from existing law. The enforceability of any particular clause will depend on its language, the structure of the agreements, and the relationship between the claims asserted and the contractual obligations at issue. Proper drafting and consistent use of forum-selection provisions remain critical to ensuring predictable dispute resolution.
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.
