Franchise Litigation in U.S. Federal Courts: Filings, Outcomes and Duration, FY2006 to June 2026

This edition: franchise litigation filings through June 30, 2026

Summary. The 2026 edition adds the 12 months ending June 30, 2026. Federal franchise filings rose to 289 from 206, the highest July-to-June total since the 12 months to June 2018 (321), and FY2026 had already passed FY2025’s full-year total by June. The rise is concentrated in a few courts and a few months, so it reads as a burst to watch, not yet a reversal of the trend.

The District of New Jersey received 70 franchise filings in the 12 months to June 30, 2026, up from 39. The Middle District of Florida received 22, up from 8, including 10 filed on a single day in May 2026. May 2026 had 42 franchise filings nationally, the busiest month of the period (FJC IDB). The IDB does not link related cases, so same-day groups may be one dispute split into several filings.

The rate per 1,000 civil filings is less useful this year: total civil filings jumped to 358,971 in the 12 months to June 30, 2026, mostly because prisoner petitions doubled to 106,497 from 51,594 (AO Table C-2). Per 1,000 contract filings, franchise cases were 9.48 in the latest 12 months.

Long-run trend: federal franchise lawsuits, FY2006 to FY2025

Summary. The federal franchise series rose from FY2006 to a FY2013 peak of 477 filings and has been lower since. Average annual filings were 391.6 in FY2006 to FY2015 and 245.0 in FY2016 to FY2025, a 37.4% decline. A straight-line fit gives -11.4 cases a year, though the shape is a rise and fall rather than a steady slope.

Nature of suit code 196, labeled Franchise in the FJC civil codebook (FJC codebook), covers “an action arising from a dispute over a franchise agreement” (AO code descriptions). The code appears on the JS 44 civil cover sheet revised in November 2004 (JS 44, Rev. 11/04), and the first 196 record in the IDB dates to December 2004. FY2006 is therefore the first full fiscal year, which is why this series starts there rather than in FY1988.

Relative to the rest of the federal docket the decline is sharper. Franchise cases were 16.76 per 1,000 contract filings in FY2013 and 6.99 in FY2025, a 58.3% drop, while total contract filings ranged from 23,492 to 35,550 a year. Per 1,000 of all civil filings, the rate fell from 1.68 to 0.7 (FJC IDB). FY2020’s civil total is inflated by 224,989 filings coded as multidistrict litigation originating in the district (45,247 in FY2019), so its per-civil rate is understated.

The data cannot say why filings fell. The IDB records no claim details, and nothing in it distinguishes a franchisor suing a former franchisee from a franchisee suing a franchisor. Changes in arbitration clauses, venue choices or state court use would all reduce federal 196 filings without any change in the number of disputes.

Where franchise cases are filed: districts and states

Summary. Federal franchise litigation is concentrated. From July 2021 to June 2026, 1,082 franchise cases were filed in 82 of the 94 federal districts, and the District of New Jersey alone took 23.8%.

New Jersey’s 257 filings compare with 64 in Maryland, 61 in the Eastern District of Michigan and 51 in the Middle District of Florida. The 10 busiest districts took 56.7% of filings, almost the same share as the 56.2% in the five years to June 2021, and the Herfindahl-Hirschman index across districts was 750 (FJC IDB).

The ranking has shifted. Maryland rose to 64 from 17 in the prior five years, while the Southern District of Florida fell to 26 from 72 and Minnesota to 25 from 52. A district’s count reflects where suits are filed, which may follow forum-selection clauses or where parties are based; the IDB records neither, so counts do not show where franchised businesses operate. Five states had no federal franchise filing in the period: VT, DE, WV, MS, WY. For where franchises themselves are located, see franchise statistics by state.

How franchise lawsuits end

Summary. Most federal franchise cases end without a decision on the merits. Of 963 franchise cases terminated from July 2021 to June 2026, 33.7% were coded as settled and 21.3% as voluntarily dismissed, together 55.0%. Judgments of any kind ended 22.6%, and trial verdicts 1.0% (10 cases).

Disposition codes come from the FJC codebook: 13 is settled, 12 voluntarily dismissed, 2, 3 and 14 other dismissals, 6 judgment on motion before trial, 4 default, 5 consent, 7 to 9 trial outcomes and 15 award of arbitrator (FJC codebook). The settled share is likely a floor: a private settlement can be closed as a voluntary dismissal (code 12) rather than as settled (code 13), so the two are best read together.

Two franchise-specific patterns stand out against other contract (NOS 190) cases. Default judgments ended 8.6% of franchise cases against 4.9%, and transfers or remands only 5.1% against 9.2%. A default judgment is entered under Rule 55 when a defendant does not defend the case (codebook). The arbitration award code was used in 2 franchise cases; it covers court-annexed arbitration programs, not private arbitration under a franchise agreement, which never enters the IDB.

Measured by procedural progress, 12 franchise cases (1.2%) ended during or after a trial (FJC IDB). For buyers weighing a franchise purchase, the practical reading is that court fights are long and uncommon; the buying a franchise guide covers the documents to review before signing.

Jurisdiction and which side won judgments

Summary. Franchise suits reach federal court mainly because the parties are from different states. Diversity of citizenship was the basis for 81.4% of franchise filings from July 2021 to June 2026 and a federal question for 18.4%. Franchise cases were less often removed from state court (13.7%) than other contract cases (27.6%).

Of 209 franchise cases that ended in a final judgment, 65.6% were coded for the plaintiff and 25.4% for the defendant. Default judgments favor plaintiffs by construction, so the comparison that matters excludes them: 45.2% plaintiff and 40.5% defendant across 126 judgments. On judgments on motion before trial, defendants prevailed in 56.2% (73 judgments). Trial judgments were too few (10) to compare.

These counts do not show whether franchisors or franchisees win. The IDB records plaintiff and defendant, not which party is the franchisor, and either side can be the plaintiff. Party names exist in the raw file; this report does not use them.

How long franchise litigation takes

Summary. A federal franchise case terminated from July 2021 to June 2026 took a median 251 days (8.2 months) from filing to termination. A quarter ended within 112 days, a quarter took longer than 493 days, and one in ten took longer than 856 days (28.1 months). 13.0% lasted more than two years.

How a case ends drives its length. Voluntarily dismissed franchise cases took a median 125 days, settled cases 297, judgments on motion 346 and trial verdicts 1,284 days, about three and a half years, though only 10 cases reached a verdict (FJC IDB). Restricting to cases filed originally or removed from state court gives a median of 261 days, so reopened and transferred records do not drive the result.

Typical durations have lengthened. The average of annual medians was 187 days for cases terminated in FY2010 to FY2012 and 242 days in FY2023 to FY2025, 29.4% longer, while other contract cases moved from 233 to 218 days. Annual medians rest on 189 to 410 cases and swing from year to year. On June 30, 2026, 320 franchise cases were pending, with a median age of 217 days; 27 were more than three years old.

Benchmark: the AO’s own median for all civil cases terminated in the 12 months to June 30, 2026 was 6.9 months, on a narrower case definition (AO Table C-5).

Franchise cases compared with all contract cases

Summary. Franchise cases behave like ordinary federal contract cases in length and like a slightly more settlement-prone version in outcome. They are a small and shrinking slice of contract litigation: 0.70% of contract filings in FY2025.

• Median duration: franchise 251 days, other contract 229, all contract 261, all civil 303 (terminated July 2021 to June 2026).
• 90th percentile: franchise 856 days, other contract 888, all civil 1,511.
• Settled or voluntarily dismissed: franchise 55.0%, other contract 49.5%.
• Other dismissals (want of prosecution, lack of jurisdiction, other): franchise 14.8%, other contract 19.8%.
• Trial verdicts: franchise 1.0%, other contract 1.3%, all contract 0.8%.

The comparison group is nature of suit 190 alone. The AO’s published “Other Contract Actions” line also includes stockholder suits (160) and contract product liability (195), which is why its FY2025 figure (14,963) is higher than the 14,027 NOS 190 filings counted here (AO Table C-2).

Regulatory context: FTC actions, disclosure and arbitration

Summary. Federal court filings are one channel among several. The FTC enforces the Franchise Rule directly, franchisors must disclose litigation and dispute-resolution terms before a sale, and many franchise agreements route disputes to arbitration, which this data cannot see.

On July 12, 2024 the FTC issued a policy statement that franchise agreements may not restrict franchisees’ communications with the FTC or other law enforcers about potential law violations, and staff guidance that franchisors cannot impose undisclosed fees (FTC policy statement, FTC press release). The Commission voted 3-2. The policy statement does not bind the FTC or the public (policy statement text).

On March 18, 2026 the FTC announced a settlement with a fitness franchisor over alleged Franchise Rule violations, with $17 million to be returned to franchisees (FTC). A suit filed by the federal government carries jurisdiction code 1 (U.S. government plaintiff); 2 federal franchise filings from July 2021 to June 2026 had a U.S. government party (FJC IDB).

Under the Franchise Rule, Item 3 of the franchise disclosure document lists certain pending and past litigation, and Item 17 must describe dispute resolution by arbitration or mediation, choice of forum and choice of law (16 CFR 436.5). An FTC staff estimate puts covered franchise sellers at about 4,000 (91 FR 24235). Set against that, the 212 federal 196 filings in FY2025 work out to 53.0 per 1,000 franchisors, a scale indicator only, since one franchisor can face many suits and many franchisors none.

Franchise disputes and their causes, as franchisees describe them: in the FTC’s 2023 request for information, which drew 5,291 comments (2,216 posted), the most common franchisee concern was unilateral changes to operating manuals, followed by misrepresentation, fees and royalties, supply restrictions and retaliation (FTC Issue Spotlight). Comments are self-selected and unverified. For the related question of who sells franchises and how brokers are regulated, see franchise broker registration.

Methods and caveats

Data. The FJC Integrated Database civil cumulative file (cv88on.zip, text file dated August 26, 2026) holds 10,960,173 records for cases terminated from statistical year 1988 through June 30, 2026 and cases pending on that date (FJC). Every code used was checked against the FJC civil codebook (Civil Codebook 1988 Forward): NOS 196 Franchise, NOS 190 Other Contract Actions, contract block 110 to 196, JURIS, ORIGIN, DISP, PROCPROG and JUDGMENT.

Counting rules. Filings are counted by fiscal year (October to September) of the AO’s filing date field (FDATEUSE), which the codebook says matches published AO tables. Duplicate records sharing district, office, docket, origin and filing date (35,622 records) were collapsed to the latest tape year. Outcomes and durations use cases terminated from July 1, 2021 to June 30, 2026 by the AO’s termination date field. Durations are termination date minus filing date.

Cross-check. Counts match the AO’s published Table C-2 for FY2019, FY2021, FY2022, FY2024, FY2025 and both June-ending periods. FY2018 differs (316 here vs 308 published in 2019) because the IDB keeps each case’s latest coding (IDB Research Guide).

Limits. Federal district courts only; no state courts, no private arbitration, no appeals. One nature of suit per case, chosen at filing. No party roles, claims or dollar outcomes (the codebook advises against using the amount received field). Party names are present in the raw file and were never read into the analysis; no case, party or docket is named anywhere in this report.