What was the outcome of the LaBarbera v. C.T. Franchising Systems, Inc. case involving Caring Transitions?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
LaBarbera v. C.T. Franchising Systems, Inc.; Case No. 2024-cp-26-08455 (Horry Cty. Ct. Com. Pleas Dec. 27, 2024). An individual principal of a franchisee filed an action alleging that C.T. Franchising Systems, Inc. ("CTFSI") did not comply with the South Carolina Business Opportunity Sales Act because it did not file a disclosure document with the secretary of state. The plaintiff sought a declaratory judgment voiding the franchise agreement and damages under the South Carolina Unfair Trade Practices Act. CTFSI disputed the claims on the basis that its ownership of a federal trademark registration exempted it from the definition of "business opportunity", removed the action to federal court (Case No. 4:25-cv-00477-SAL Dist. S.C.), and filed a motion to transfer the action to the Southern District of Ohio. The plaintiff voluntarily dismissed the action on February 24, 2025.
Other than these actions, no litigation is required to be disclosed in this Item.
Source: Item 3 — LITIGATION (FDD pages 10–11)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, the LaBarbera v. C.T. Franchising Systems, Inc. case was voluntarily dismissed by the plaintiff on February 24, 2025. The case, initiated by an individual principal of a franchisee, alleged that C.T. Franchising Systems, Inc. did not comply with the South Carolina Business Opportunity Sales Act due to the absence of a filed disclosure document with the secretary of state.
The plaintiff in the LaBarbera case sought a declaratory judgment to void the franchise agreement and also pursued damages under the South Carolina Unfair Trade Practices Act. Caring Transitions disputed these claims, asserting that its ownership of a federal trademark registration exempted it from the definition of "business opportunity." Consequently, Caring Transitions moved the case to federal court and filed a motion to transfer the action to the Southern District of Ohio.
Ultimately, the voluntary dismissal of the action means that the court did not make a determination on the merits of either side's arguments. The FDD indicates that there is no other litigation required to be disclosed in Item 3.