The U.S. District Court for the Southern District of New York had the opportunity once again to review the subject matter jurisdictional scope of the New York Franchise Act in Safe Step Walk In Tub Co. v. CKH Industries, 2017 WL 1050126 (S.D.N.Y. 2017), in which plaintiff—the manufacturer of walk-in bathtubs—commenced an action for unpaid fees from a dealer of those tubs. The dealer-defendant counterclaimed that plaintiff was in fact a “franchisor,” as that term is defined in the Act, and plaintiff sought to dismiss inter alia that assertion for failure to state a cause of action.

After noting that the defendant plausibly alleged a substantial association with plaintiff’s trademark and service mark, that a marketing plan prescribed in substantial part by plaintiff was imposed upon defendant, and that the agreement called for the payment of a $10,000 “licensing” fee, the court held that defendant’s operation qualified as a “franchise” under the New York Franchise Act, entitling it to pursue the Act’s protections and causes of action “at this stage.”