The Eighth Circuit Court of Appeals has upheld a lower court's dismissal of T&T Management, Inc.'s lawsuit against Choice Hotels International, Inc. and others. The decision, filed on June 25, 2026, affects T&T's claims regarding a franchise agreement for operating a Country Inn & Suites hotel in Florida. This ruling is significant for hotel franchises and their operational agreements across the country.
T&T Management, a Florida corporation, entered into a License Agreement in 2011, allowing it to operate a Country Inn & Suites hotel in Port Orange, Florida. The agreement included a provision that prohibited the franchisor and its affiliates from operating other hotels using the Country brand within a designated geographic area, known as the Protected Area. However, the situation escalated when Radisson acquired the Country brand in 2016 and subsequently sold it to Choice Hotels in 2022. This transfer led to disputes over licensing rights and the interpretation of the License Agreement.
The conflict arose when T&T alleged that Choice Hotels breached the License Agreement by allowing Sunshine Fund Port Orange, LLC to operate a WoodSpring hotel within the Protected Area. T&T claimed that the licensing of the WoodSpring brand violated the exclusivity granted to them under the License Agreement. The case was initially filed in Florida but was later moved to Minnesota, where the district court dismissed T&T's claims, stating that they failed to state a valid claim.
The Eighth Circuit reviewed the case and affirmed the lower court's decision. The judges noted that the License Agreement clearly defined the terms and conditions regarding the use of trademarks and brands. They determined that the agreement allowed Choice Hotels to license other brands, including WoodSpring, within the Protected Area. The court stated, "The plain, unambiguous language of the Agreement prohibits Choice from licensing the 'Marks' within the Protected Area," effectively ruling in favor of Choice Hotels.
In its opinion, the court explained that the definitions of 'Marks' and 'System' in the License Agreement were specific to the Country brand and did not extend to other brands like WoodSpring. T&T's interpretation was deemed unreasonable, as the agreement's language clearly distinguished between the Country brand and other hotel brands. The court emphasized the importance of adhering to the plain meaning of contracts, stating, "When the language of a contract is clear and unambiguous, courts must give effect to the contract as written." The court also addressed T&T's claims of breach of the implied covenant of good faith and fair dealing, stating that such claims cannot stand without a breach of an express term of the contract. Since T&T's breach-of-contract claims were dismissed, the court found that the implied covenant claims were also without merit.
Furthermore, T&T's allegations of tortious interference against Sunshine were also dismissed. The court ruled that there was no breach of contract by Choice Hotels, and thus, Sunshine could not be found liable for interfering with T&T's business relationships. The judges noted that T&T's claims regarding future business relationships were speculative and did not provide sufficient evidence of an actual and identifiable understanding with customers.
This ruling has broader implications for franchise agreements and the rights of franchisors and franchisees. It clarifies the extent to which franchisors can operate under different brands in protected areas and reinforces the importance of clear contractual language. The decision may impact how future franchise agreements are drafted and interpreted, ensuring that both parties understand their rights and obligations.
As for the next steps, T&T Management may consider appealing the Eighth Circuit's decision to the Supreme Court, although details on whether they will pursue this option were not available in the court filing. The outcome of this case could influence other pending cases involving franchise agreements and licensing disputes.