Supreme Court Won’t Review Montana Franchise Decision

WASHINGTON, DC— The U.S. Supreme Court this week declined to review Choice Hotels International’s petition for a writ of certiorari to the U.S. Court of Appeals for the Ninth Circuit, thereby letting stand a Montana State Court decision that found the franchise agreement entered into between Bozeman, MT-based Ticknor Lodging Corp. and Choice Hotels to be “an unconscionable contract.” Remarking on the top court’s decision to deny review of the petition, National Franchise Council President Neil Simon said: “We are very disappointed that the U.S. Supreme Court did not see fit to accept Choice Hotels’ petition. This is a case crying out for review…and reversal.” This litigious situation initially developed in the wake of Choice reportedly terminating Ticknor’s franchise agreement (in 1999) for failure to pay outstanding fees, followed by the brand’s filing of a demand for arbitration as set forth in the standard language of the contract. However, Ticknor resisted this call for arbitration and instead filed suit in Montana State Court for “breach of contract.” Ultimately, a joint consensus between the National Franchise Council and Choice Hotels intimated that “the success of franchising depends on contract uniformity…which can only be maintained if contracts are enforceable.” —Michael Billig