Bathworks Enterprises LLC v. ReBath LLC

• Court: District Court, D. Arizona
• Decided: June 23, 2026
• Docket: 2:25-cv-04437
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Bathworks Enterprises LLC, No. CV-25-04437-PHX-KML

10 Plaintiff, ORDER

11 v.

12 ReBath LLC,

13 Defendant. 14 15 Plaintiff Bathworks Enterprises, LLC operates two Florida franchises under 16 agreements with defendant Re-Bath, LLC, a franchisor of residential bathroom remodeling 17 businesses. Bathworks alleges Re-Bath charged unauthorized fees, misused advertising 18 funds, restricted local marketing efforts, and then retaliated against it for challenging that 19 conduct in court. Re-Bath moved to dismiss most of Bathworks’s claims. The motion is 20 granted in part and denied in part. 21 I. Background 22 Defendant Re-Bath is a Delaware company that franchises residential bathroom 23 remodeling businesses. (Doc. 16 at 3–4.) Its principal place of business is in Arizona. (Doc. 24 16 at 3.) Plaintiff Bathworks Enterprises operates two Re-Bath franchises in Florida. (Doc. 25 16 at 3.) In April 2022, the parties entered into two separate but identical franchise 26 agreements.1 (Doc. 16 at 3.) Bathworks now alleges Re-Bath imposed unauthorized 27 technology fees, misused contributions to its Advertising Fund, restricted franchisees’ local

28 1 For simplicity and because the franchise agreements are substantively identical, the court will refer to a singular agreement throughout this order. 1 marketing efforts, and then retaliated when Bathworks challenged that conduct. (Doc. 16 2 at 2–3.) 3 Bathworks alleges Re-Bath had limited contractual authority to charge technology- 4 related fees. Before executing the franchise agreements, Bathworks received Re-Bath’s 5 Franchise Disclosure Document (“FDD”). (Doc. 16 at 6.) Bathworks alleges 16 C.F.R. 6 § 436.5 required Re-Bath to disclose in the FDD all fees Bathworks would pay during the 7 contract term. (Doc. 16 at 6.) The FDD identified only one technology-related cost: an 8 ongoing monthly software fee of approximately $300 for a customer relationship 9 management (“CRM”) program. (Doc. 16 at 6.) The franchise agreement also addressed 10 technology-related charges by allowing Re-Bath to collect fees or charges relating to the 11 “Computer System[2] . . . for payment to the third party supplier(s) of the Computer System, 12 or components thereof, on a consolidated basis or otherwise.” (Docs. 16 at 7; 16-1 at 19.) 13 The franchise agreement allowed Re-Bath to mandate “reasonable” technology-related 14 changes to the Computer System and required software. (Docs. 16 at 7–8; 16-1 at 19.) 15 In May 2024, Re-Bath announced a new consolidated technology fee, claiming it 16 would provide new software tools and future technology enhancements. (Doc. 16 at 8–9.) 17 Re-Bath initially proposed a $1,500 per-territory fee plus monthly per-user fees. (Doc. 16 18 at 9.) After franchisee pushback, Re-Bath announced a revised population-based fee 19 structure of $1 per 1,000 people in each franchisee’s territory. (Doc. 16 at 9.) On August 20 5, 2024, Bathworks received its first consolidated technology-fee invoice: $3,021 for July 21 2024. (Doc. 16 at 9.) Before that, Bathworks’s monthly technology fee had been $490. 22 (Doc. 16 at 10.) Because Re-Bath was authorized to automatically withdraw amounts from 23 Bathworks’s account, Bathworks alleges it was forced to either allow the withdrawals or 24 turn off automatic payments and risk default. (Doc. 16 at 11.) 25

26 2 According to the franchise agreement, the “Computer System” consisted of: back office and point of sale systems, customer relationship management systems, accounting systems, 27 reporting and data exchange systems, data, audio, video, and voice storage, retrieval, and transmission systems; physical, electronic, and other security systems; printers and other 28 peripheral devices; archival back-up systems; e-mail systems; and Internet access mode and speed. (Doc. 16-1 at 48.) 1 Bathworks alleges the increased fee violated the franchise agreement. (Doc. 16 at 2 8–9.) The fee was not itemized and Bathworks alleges Re-Bath did not give sufficient 3 notice of the amount owed or the reason for it. (Doc. 16 at 9–10.) According to Bathworks, 4 the fee also did not lead to new technology, enhanced functionality, or improved services. 5 (Doc. 16 at 9.) Instead, many of the tools were allegedly programs inaccessible to 6 franchisees, redundant of programs already used, or otherwise not properly included in the 7 new fee. (Doc. 16 at 10.) Bathworks allegedly later3 discovered the fee covered Re-Bath’s 8 own overhead and labor costs, even though neither the FDD nor the franchise agreement 9 allowed Re-Bath to recover those costs through a technology fee. (Doc. 16 at 11.) 10 In addition to the technology fee increase, Bathworks challenges the way Re-Bath 11 handled the Advertising Fund. (Doc. 16 at 12.) Under the franchise agreement, franchisees 12 were required to contribute a percentage of gross revenues to the Advertising Fund, which 13 was intended to be used for marketing and brand awareness for the benefit of franchisees. 14 (Doc. 16 at 12.) Bathworks alleges the franchise agreement prohibits Re-Bath from using 15 the Advertising Fund for its ordinary operating expenses. (Doc. 16 at 12.) Re-Bath 16 nevertheless allegedly used Advertising Fund contributions to subsidize overhead and 17 labor expenses unrelated to marketing, technology platforms that benefited only Re-Bath 18 itself, and legal expenses from prior litigation. (Doc. 16 at 12.) 19 Bathworks also challenges Re-Bath’s control over franchisees’ local marketing 20 efforts. (Doc. 16 at 12–13.) According to the complaint, Re-Bath pressured franchisees to 21 use Re-Bath-controlled marketing services, made it difficult to work with outside 22 marketing agencies, and limited access to approved marketing materials unless franchisees 23 used its preferred vendors. (Doc. 16 at 12–13.) Those restrictions allegedly prevented 24 franchisees from using their preferred and longstanding local marketing partners, even 25 though the franchise agreement did not authorize Re-Bath to exercise that level of control 26 over local marketing. (Doc. 16 at 13.) The restrictions also allegedly forced franchisees to 27 3 The complaint states this discovery occurred in November 2024 (Doc. 16 at 11), but 28 Bathworks’s response to the motion to dismiss claims that was a scrivener’s error and the correct date of the discovery was November 2025 (Doc. 20 at 4). 1 buy marketing materials at inflated prices and submit marketing invoices through a 2 platform not required by the franchise agreement. (Doc. 16 at 13–15.) 3 Bathworks filed its original complaint on November 26, 2025. (Doc. 1.) One month 4 later, Re-Bath issued a notice of default identifying four alleged breaches: use of 5 unauthorized marketing vendors, failure to comply with laws and operational standards in 6 connection with a Home Depot project, failure to submit local marketing spend reports 7 through Concur, and unauthorized sales and jobs outside Bathworks’s protected territory. 8 (Doc. 16 at 15.) In January 2026, Bathworks disputed the alleged defaults. (Doc. 16 at 15.) 9 On February 5, 2026, Re-Bath issued a Notice of Termination purporting to terminate both 10 franchise agreements. (Doc. 16 at 15.) Bathworks alleges the default and termination were 11 retaliatory and pretextual. (Doc. 16 at 15–16.) 12 On February 6, 2026, Bathworks filed an amended complaint that asserts claims for 13 breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent 14 concealment, fraudulent misrepresentation, violation of the Arizona Consumer Fraud Act 15 (“ACFA”), specific performance for accounting, and declaratory judgment. (Doc. 16 at 16 19–27.)4 Re-Bath moves to dismiss all claims except the wrongful-termination aspects of 17 the breach-of-contract and implied-covenant counts. (Doc. 19 at 1–3.) 18 II. Legal Standard 19 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 20 accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 21 556 U.S. 662, 678 (2009) (simplified). This is not a “probability requirement,” but a 22 requirement that the factual allegations show “more than a sheer possibility that a defendant 23 has acted unlawfully.” Id. A claim is facially plausible “when the plaintiff pleads factual 24 content that allows the court to draw the reasonable inference that the defendant is liable 25 for the misconduct alleged.” Id. “Determining whether a complaint states a plausible claim 26 for relief . . . [is] a context-specific task that requires the reviewing court to draw on its 27 4 Bathworks also alleged a Florida Deceptive and Unfair Trade Practices Act claim but has 28 withdrawn that claim. (Doc. 20 at 3 n.1.) Bathworks says it will seek leave to amend to insert a new claim but has not done so as f the date of this order. (Doc. 20 at 3 n.1.) 1 judicial experience and common sense.” Id. at 679. 2 III. Analysis 3 Re-Bath moves to dismiss most of Bathworks’s claims. It argues the franchise 4 agreement’s contractual limitations provision bars nearly all claims, any timely fraud- 5 based theories fail Rule 9(b), the ACFA does not apply to franchises, and the accounting 6 and declaratory-judgment claims are not independent causes of action. (Doc. 19 at 2–3.) 7 Re-Bath does not seek dismissal of the wrongful-termination theories within Bathworks’s 8 breach-of-contract and implied-covenant claims. (Docs. 19 at 2; 21 at 2 n.1.) Because Re- 9 Bath does not separately challenge the merits of the breach-of-contract or implied-covenant 10 claims, they are analyzed only for timeliness. The parties’ arguments do not map neatly 11 onto the complaint’s formal claim labels, so the court addresses the motion by factual 12 theory where necessary rather than proceeding claim-by-claim. 13 A. Timeliness 14 Re-Bath argues that “nearly all” of Bathworks’s claims are untimely under the 15 franchise agreement, except those regarding wrongful termination. (Doc. 19 at 7.) A 16 complaint may be dismissed on limitations grounds only when untimeliness is apparent on 17 the face of the complaint. Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 18 2006). Under Arizona law, “parties are at liberty to contract and may, indeed, agree to 19 shorten the statute of limitations from that which normally applies to claims.” Zuckerman 20 v. Transamerica Ins. Co., 650 P.2d 441, 446 (Ariz. 1982). Section 24.7 of the franchise 21 agreement outlines limitations periods for claims arising out of the contract and the 22 franchise relationship. (Doc. 16-1 at 53.) Under that provision, such claims are barred 23 unless brought before the earliest of three deadlines: the applicable statutory limitations 24 period, “one (1) year after the date upon which a party discovered, or should have 25 discovered, the facts giving rise to an alleged claim,” or “two (2) years after the first act or 26 omission giving rise to an alleged claim.” (Doc. 16-1 at 53.) Bathworks does not dispute 27 the limitations provision is enforceable. (See Doc. 20 at 6.) 28 1 1. Technology-fee Theories 2 Many of Bathworks’s claims stem from Re-Bath’s increased technology fees. The 3 relevant question for assessing the timeliness of any of these claims is when Bathworks 4 discovered, or should have discovered, the facts giving rise to them. Arizona’s discovery 5 rule does not require a plaintiff to know every fact supporting its claim before the 6 limitations period begins to run. Instead, the claim accrues when the plaintiff knows, or 7 through reasonable diligence should know, the facts underlying the claim. Gust, Rosenfeld 8 & Henderson v. Prudential Ins. Co. of Am., 898 P.2d 964, 966 (Ariz. 1995). The discovery 9 rule is meant to protect plaintiffs where injuries or acts causing the injury may be difficult 10 to detect; it does not postpone accrual when the injury is open and obvious. Id. at 967. 11 The complaint clearly establishes Bathworks knew or should have known the facts 12 giving rise to its technology-fee theory by August 2024. Re-Bath announced the new 13 consolidated technology-fee structure in May 2024 and justified the fee then by pointing 14 to multiple technology tools it purportedly provided franchisees. (Doc. 16 at 8–9.) On 15 August 5, 2024, Bathworks received a monthly consolidated technology-fee invoice for 16 $3,021, scheduled for automatic withdrawal four days later, representing an increase of 17 more than 500% over the previous fee of $490 per month. (Doc. 16 at 9–10.) 18 By August 2024, Bathworks had enough information to trigger the one-year 19 limitations period. Bathworks knew the FDD disclosed only a monthly CRM software cost, 20 knew the franchise agreement limited Re-Bath’s authority to collect technology-related 21 fees, and knew Re-Bath had suddenly imposed a consolidated technology fee more than 22 six times higher than Bathworks previously paid. (Doc. 16 at 6–10.) Bathworks also knew 23 the fee was not itemized and Re-Bath had not provided the same type of notice it 24 historically gave for vendor-cost increases. (Doc. 16 at 8–10.) Those facts were enough to 25 put Bathworks on notice of a potential wrong and require it to investigate whether the new 26 fee exceeded Re-Bath’s authority under the franchise agreement. See Gust, 898 P.2d at 27 966–67. 28 1 Bathworks’s later discovery of additional facts, such as that the technology fee 2 allegedly included Re-Bath’s overhead and labor costs, does not change that conclusion. 3 The technology-fee theory is not limited to the inclusion of overhead and labor. The 4 complaint alleges Re-Bath imposed a new, undisclosed, non-itemized, dramatically-larger 5 technology fee without sufficient notice, without substantiation, and without any 6 corresponding increase in functionality or value. (Doc. 16 at 8–11.) All of these facts were 7 obvious by August 2024, even if additional details were filled in later. Because Bathworks 8 knew enough by August 2024 to identify the alleged wrong and resulting injury, any claim 9 based on the initial imposition of the technology fee accrued then. Gust, 898 P.2d at 966. 10 That conclusion does not bar all aspects of those claims based on the increased 11 technology fee. Under Arizona law, breaches may accrue separately via recurring 12 payments, so a plaintiff may recover for injuries within the limitations period even if earlier 13 ones are time-barred. See Builders Supply Corp. v. Marshall, 352 P.2d 982, 986 (Ariz. 14 1960). Here, Re-Bath continued collecting monthly technology fees through automatic 15 withdrawals that Bathworks says were not contractually authorized. Each allegedly- 16 unauthorized withdrawal may therefore constitute a separate breach rather than a 17 continuing consequence of the first improper invoice.5 See id.; cf. Ancala Holdings, L.L.C. 18 v. Price, 220 F. App’x 569, 572 (9th Cir. 2007) (rejecting continuing-breach theory under 19 Arizona law where claim was not based on “recurring payments that have become due”). 20 Bathworks may therefore pursue its technology-fee theory only to the extent it is based on 21 allegedly unauthorized withdrawals occurring within one year before the complaint was 22 filed (i.e., withdrawals on or after November 26, 2024). 23 24

25 5 Re-Bath cites City of Chandler v. Roosevelt Water Conservation Dist., 559 P.3d 184 (Ariz Ct. App. 2024), but the Arizona Supreme Court recently ordered that opinion depublished. 26 See City of Chandler v. Roosevelt Water Conservation Dist., No. CV-24-0267-PR, 2026 WL 1141802, at *1 (Ariz. Apr. 28, 2026). Arizona courts therefore view that case as 27 “neither precedential nor persuasive authority.” Hansen v. Chon-Lopez in & for Cnty. of Pima, 501 P.3d 762, 772 n.6 (Ariz. Ct. App. 2021). In any event, this case involves 28 recurring withdrawals of money instead of a single repudiation followed by continuing effects. 1 2. Franchise Disclosure Document Theories 2 Bathworks alleges Re-Bath was required to disclose the consolidated technology 3 fee in the FDD but failed to. (Doc. 16 at 6.) Instead, the FDD identified only one ongoing 4 technology-related charge: a monthly fee of approximately $300 for a CRM system, which 5 Bathworks says was presented as a pass-through payment to the software provider rather 6 than a separate revenue source for Re-Bath. (Doc. 16 at 6.) The FDD also listed several 7 other Computer System programs but stated Re-Bath did not charge franchisees for those 8 programs. (Doc. 16 at 7.) Bathworks believes the failure to disclose all fees supports fraud- 9 based claims. (See Docs. 16 at 23–24; 20 at 3, 11–12.) Because FDD-based theories depend 10 on information Re-Bath allegedly failed to disclose before Bathworks signed the franchise 11 agreements, § 24.7(C)’s two-year outside limit applies. That provision bars claims brought 12 more than two years after the “first act or omission giving rise to an alleged claim.” (Doc. 13 16-1 at 53.) Any FDD omission occurred no later than April 11, 2022, when Bathworks 14 signed the franchise agreements. (Doc. 16 at 7.) Bathworks did not file this case until 15 November 2025 and offers no convincing argument for tolling the limitations period. Thus, 16 any claim based on Re-Bath’s alleged failure to disclose the consolidated technology fee 17 in the FDD is time-barred. 18 3. Advertising and Marketing Theories 19 Re-Bath has not shown the Advertising Fund or marketing-restriction theories are 20 time-barred at this stage. Bathworks alleges Re-Bath misused Advertising Fund 21 contributions by diverting them to overhead, technology, and legal expenses unrelated to 22 the fund’s marketing purpose. (Doc. 16 at 12.) Bathworks also alleges Re-Bath improperly 23 restricted franchisees’ local marketing by limiting their ability to work with outside 24 vendors, inflating prices for marketing materials, and imposing unauthorized reporting 25 requirements. (Doc. 16 at 12–15.) Unlike the technology-fee allegations, however, the face 26 of the complaint does not establish when Bathworks discovered or should have discovered 27 this alleged misconduct. See Huynh, 465 F.3d at 997. At least some marketing-related 28 allegations appear tied to reports for May through July 2025, within one year of the 1 November 2025 complaint. (Doc. 16 at 15.) Because the complaint alone does not establish 2 the Advertising Fund or marketing-restriction theories are untimely, they will not be 3 dismissed on timeliness grounds. 4 B. Fraudulent Misrepresentation and Concealment 5 Bathworks’s remaining fraud theories are narrow. The only potentially timely 6 common-law fraud theories are based on Re-Bath’s allegedly unauthorized technology-fee 7 withdrawals within one year before the complaint was filed. Bathworks frames those 8 theories in two ways: fraudulent misrepresentation and fraudulent concealment. (Doc. 16 9 at 22–24.) 10 To state a fraud claim, the complaint must allege “with particularity the 11 circumstances constituting fraud.” Fed. R. Civ. P. 9(b); Vess v. Ciba-Geigy Corp. USA, 12 317 F.3d 1097, 1103 (9th Cir. 2003). Under this standard, Bathworks must identify the 13 “who, what, when, where, and how” of the alleged misconduct. Vess, 317 F.3d at 1106. 14 The allegations must be specific enough to give the defendant notice of the particular 15 misconduct alleged so the defendant can defend against the charge rather than simply deny 16 wrongdoing. Neubronner v. Milken, 6 F.3d 666, 671–72 (9th Cir. 1993). In Arizona, a 17 fraudulent-misrepresentation claim requires nine elements: “(1) a representation; (2) its 18 falsity; (3) its materiality;” the speaker’s (4) knowledge of its falsity; (5) intent that it be 19 acted upon in the way that would be reasonably expected; the hearer’s (6) ignorance of its 20 falsity; (7) reliance on its truth; (8) right to rely on it; and (9) consequent and proximate 21 injury. Comerica Bank v. Mahmoodi, 229 P.3d 1031, 1033–34 (Ariz. Ct. App. 2010). 22 “‘[F]ailure to [plead] any one of [these elements] is fatal to the cause of action.’” Tavilla 23 v. Cephalon, Inc., 870 F. Supp. 2d 759, 774 (D. Ariz. 2012) (citing Fridenmaker v. Valley 24 Nat’l Bank of Ariz., 534 P.2d 1064, 1068 (Ariz. Ct. App. 1975)). 25 Liability for fraudulent concealment lies against any “party to a transaction who by 26 concealment or other action intentionally prevents the other from acquiring material 27 information.” Wells Fargo Bank v. Arizona Laborers, Teamsters & Cement Masons Loc. 28 No. 395 Pension Tr. Fund, 38 P.3d 12, 34 n.22 (Ariz. 2002), as corrected (Apr. 9, 2002). 1 Active concealment may be actionable even where a party has no independent duty to 2 disclose. Id. at 35–36. 3 Bathworks’s fraudulent-misrepresentation allegations do not satisfy Rule 9(b). For 4 reasons already explained, the FDD-based misrepresentation theory is time-barred. What 5 remains post-agreement are claims Re-Bath misrepresented both that the increased 6 technology fees were necessary to recover actual costs, and the nature and purpose of the 7 consolidated technology fee. But the complaint does not identify any timely statement to 8 Bathworks with the specificity Rule 9(b) requires. The concrete statements identified in the 9 complaint occurred during the May and June 2024 rollout of the consolidated technology 10 fee, outside the one-year limitations period. (Doc. 16 at 8–9.) And although the complaint 11 references a January 2025 internal communication from Re-Bath’s former CFO, that 12 allegation concerns Re-Bath’s internal understanding of its authority to collect technology 13 fees, not any representation made to Bathworks. (Doc. 16 at 8.) Bathworks does not 14 identify a timely affirmative misrepresentation, the speaker, the manner of communication, 15 Bathworks’s reliance on that particular statement, or why that particular statement was 16 false when made. Comerica Bank, 229 P.3d at 1033–34. Accordingly, the fraudulent- 17 misrepresentation claim is dismissed. 18 As to fraudulent concealment, Bathworks plausibly pleads a narrow theory with 19 particularity. The complaint identifies Re-Bath as the party that imposed and collected the 20 consolidated technology fee. (Doc. 16 at 8–11.) It identifies the actively-concealed 21 information as the actual basis, calculation, and allocation of that fee—specifically, that 22 the fee allegedly covered Re-Bath’s overhead and labor costs rather than technology- 23 related charges authorized by the franchise agreement. (Doc. 16 at 10–11, 22–23.) It 24 explains when the concealment occurred: each time Re-Bath collected the fee without 25 disclosing what Bathworks was actually paying for. (Doc. 16 at 9–11.) It also sets out how 26 the concealment occurred: Re-Bath billed the fee without itemization explaining what 27 Bathworks was paying for, and collected the fee through automatic withdrawals from 28 Bathworks’s account. (Doc. 16 at 9–11.) And it identifies why the concealment was 1 allegedly fraudulent: Re-Bath allegedly knew the intended fee structure was not authorized 2 under Bathworks’s version of the franchise agreement but imposed it anyway, while 3 concealing information that would have revealed the fee exceeded Re-Bath’s contractual 4 authority. (Doc. 16 at 8.) Taken together, those facts identify the who, what, when, where, 5 and how of the alleged concealment and give Re-Bath notice of the particular theory being 6 asserted. See Vess, 317 F.3d at 1106; Neubronner, 6 F.3d at 671. 7 Re-Bath argues the concealment claim should fail because Bathworks does not 8 identify a post-agreement transaction or a duty to disclose. (Doc. 19 at 8–9.) But each 9 timely withdrawal of the technology fee may qualify as a transaction, all of which occurred 10 post-agreement. See State ex rel. Brnovich v. City of Phx., 468 P.3d 1200, 1205 (Ariz. 11 2020) (explaining “transaction” may mean an “exchange or transfer” of funds, business 12 dealings, or the performance of a contract). And because Bathworks alleges intentional 13 concealment rather than mere nondisclosure, the claim does not fail for lack of an 14 independent duty to disclose. See Wells Fargo, 38 P.3d at 34 n.22, 35–36. Accordingly, 15 the fraudulent-concealment claim may proceed to the extent it is based on allegedly 16 unauthorized technology-fee withdrawals on or after November 26, 2024. 17 C. Arizona Consumer Fraud Act 18 The ACFA prohibits “deception, deceptive or unfair act or practice, fraud, false 19 pretense, false promise, misrepresentation, or concealment, suppression or omission of any 20 material fact with intent that others rely on such concealment, suppression or omission, in 21 connection with the sale or advertisement of any merchandise.” A.R.S. § 44-1522(A); see 22 Cheatham v. ADT Corp., 161 F. Supp. 3d 815, 826 (D. Ariz. 2016). “Merchandise” 23 includes “objects, wares, goods, commodities, intangibles, real estate or services.” 24 A.R.S. § 44-1521(5). Claims under the ACFA are subject to Rule 9(b)’s particularity 25 requirements. See Gould v. M & I Marshall & Isley Bank, 860 F. Supp. 2d 985, 988 n.2 26 (D. Ariz. 2012). 27 Although the parties debate the issue, the court need not decide whether the ACFA 28 can ever apply to the sale of a franchise. Any ACFA theory based on Re-Bath’s FDD 1 disclosures or the sale of the franchise is untimely under the franchise agreement. The only 2 potentially-timely theory concerns Re-Bath’s later technology-fee withdrawals. That 3 theory plausibly falls within the ACFA because Bathworks alleges the recurring fee was 4 tied to software tools and technology platforms Re-Bath provided to franchisees, “services” 5 which undoubtedly qualify as merchandise under the statute. A.R.S. § 44-1521(5). Re-Bath 6 argues the ACFA does not apply because this dispute arises from a franchise relationship 7 (Docs. 19 at 9–11; 21 at 8–10), but does not convincingly explain why a recurring 8 technology fee for software tools and technology platforms cannot qualify as a charge for 9 services. And the alleged deception is pleaded with particularity for the same reason as the 10 fraudulent-concealment theory: Bathworks alleges Re-Bath concealed the basis, 11 calculation, and allocation of the fee through non-itemized invoices and automatic 12 withdrawals while collecting charges Bathworks says were not authorized by the franchise 13 agreement. (Doc. 16 at 8–11.) The ACFA claim therefore may proceed only as to allegedly 14 unauthorized technology-fee withdrawals on or after November 26, 2024. 15 The advertising and marketing-related ACFA theories do not survive. Bathworks 16 alleges Re-Bath misused Advertising Fund contributions, restricted local marketing 17 vendors, imposed inflated markups on marketing materials, and required franchisees to 18 submit marketing invoices through Concur. (Doc. 16 at 12–15, 24–25.) Those allegations 19 do not plead fraud with the particularity Rule 9(b) requires. Bathworks does not identify a 20 specific deceptive statement or act of concealment tied to those marketing practices, when 21 it occurred, who made it, what Bathworks relied on, or how that conduct caused ACFA 22 damages distinct from the alleged contractual harm. See Vess, 317 F.3d at 1106. Thus, the 23 ACFA claim may proceed only as to the timely technology-fee concealment theory. 24 D. Demand for Accounting 25 Bathworks asserts a demand for accounting, arguing the franchise agreement 26 entitles it to a full accounting of Re-Bath’s expenditures from the Advertising Fund. (Doc. 27 16 at 21.) Under Arizona law, actions for accounting are generally reserved for situations 28 involving a fiduciary relationship. Wright v. Chase Home Fin. LLC, No. CV-11-0095- 1 PHX-FJM, 2011 WL 2173906, at *3 (D. Ariz. June 2, 2011) (citing Mollohan v. Christy, 2 294 P.2d 375, 376–77 (Ariz. 1956)). When there is a commercial contract, a fiduciary 3 relationship exists only when one party agrees to serve in a fiduciary capacity. Urias v. 4 PCS Health Sys., Inc., 118 P.3d 29, 35 (Ariz. Ct. App. 2005); see also Best W. Int’l, Inc. v. 5 AV Inn Assocs. 1, LLC, No. CV-08-2274-PHX-DGC, 2010 WL 2595274, at *4 (D. Ariz. 6 June 24, 2010), aff’d, 464 F. App’x 568 (9th Cir. 2011) (treating franchisor-franchisee 7 relationship as commercial contract that did not impliedly create a fiduciary duty). Here, 8 the franchise agreement explicitly states that Re-Bath assumes no fiduciary obligation in 9 maintaining, directing, or administering the Advertising Fund. (Doc. 16-1 at 29.) 10 Bathworks points to no other allegations showing a fiduciary relationship and does not 11 explain why it could not use ordinary discovery to determine how Re-Bath used 12 Advertising Fund contributions. Accordingly, the “Specific Performance—Demand for 13 Accounting” claim is dismissed. 14 E. Declaratory Judgment 15 Bathworks seeks a declaratory judgment that Re-Bath lacked authority under the 16 franchise agreement to impose the challenged technology fees, use Advertising Fund 17 contributions for non-marketing purposes, and restrict Bathworks’s local marketing 18 activities. (Doc. 16 at 26–27.) The Declaratory Judgment Act provides a remedy, not an 19 independent cause of action. City of Reno v. Netflix, Inc., 52 F.4th 874, 878–79 (9th Cir. 20 2022). And even when jurisdiction exists, the court has discretion whether to entertain 21 declaratory relief. Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220, 1223 (9th Cir. 1998) (en 22 banc). Here, the requested declaratory relief merely mirrors Bathworks’s contract theories, 23 so resolving the breach-of-contract claim will resolve whether Re-Bath’s challenged 24 conduct was authorized by the franchise agreement. See HM Hotel Props. v. Peerless 25 Indem. Ins. Co., 874 F. Supp. 2d 850, 855 (D. Ariz. 2012) (dismissing declaratory-relief 26 claim as duplicative of breach-of-contract claim). Accordingly, the standalone declaratory 27 judgment claim is dismissed. However, Bathworks may seek declaratory relief as a remedy 28 if appropriate and tied to a viable underlying claim. 1 Accordingly, 2 IT IS ORDERED Re-Bath’s motion to dismiss (Doc. 19) is GRANTED IN PART 3 and DENIED IN PART as explained in this order. 4 IT IS FURTHER ORDERED as follows: 5 The parties are directed to meet, confer, and develop a Rule 26(f) Joint Case 6 Management Report, which must be filed within 4 weeks of the date of this order. It is 7 the responsibility of plaintiff(s) to initiate the Rule 26(f) meeting and prepare the Joint Case 8 Management Report. Defendant(s) shall promptly and cooperatively participate in the Rule 9 26(f) meeting and assist in preparation of the Joint Case Management Report. 10 The Joint Case Management Report shall contain the following information in 11 separately-numbered paragraphs. 12 1. The parties who attended the Rule 26(f) meeting and assisted in developing 13 the Joint Case Management Report; 14 2. A list of all parties in the case, including any parent corporations or entities 15 (for recusal purposes); 16 3. Any parties that have not been served and an explanation of why they have 17 not been served, and any parties that have been served but have not answered 18 or otherwise appeared; 19 4. A statement of whether any party expects to add additional parties to the case 20 or otherwise amend pleadings; 21 5. The names of any parties not subject to the court’s personal (or in rem) 22 jurisdiction; 23 6. A description of the basis for the court’s subject matter jurisdiction, citing 24 specific jurisdictional statutes. If jurisdiction is based on diversity of 25 citizenship, the report shall include a statement of the citizenship of every 26 party and a description of the amount in dispute. See 28 U.S.C. §1332; 27 7. A short statement of the nature of the case (no more than three pages), 28 including a description of each claim, defense, and affirmative defense; 1 8. A listing of contemplated motions and a statement of the issues to be decided 2 by those motions; 3 9. Whether the case is suitable for reassignment to a United States Magistrate 4 Judge for all purposes or suitable for referral to a United States Magistrate 5 Judge for a settlement conference; 6 10. The status of any related cases pending before this or other courts; 7 11. A discussion of any issues relating to preservation, disclosure, or discovery 8 of electronically stored information (“ESI”), including the parties’ 9 preservation of ESI and the form or forms in which it will be produced; 10 12. A discussion of any issues relating to claims of privilege or work product; 11 13. A discussion of necessary discovery, which should take into account the 12 December 1, 2015 amendments to Rule 26(b)(1) and should include: 13 a. The extent, nature, and location of discovery anticipated by the parties 14 and why it is proportional to the needs of the case; 15 b. Suggested changes, if any, to the discovery limitations imposed by the 16 Federal Rules of Civil Procedure; 17 c. The number of hours permitted for each deposition. The parties also 18 should consider whether a total number of deposition hours should be 19 set in the case, such as twenty total hours for plaintiffs and twenty 20 total hours for defendants. Such overall time limits have the advantage 21 of providing an incentive for each side to be as efficient as possible in 22 each deposition, while also allowing parties to allocate time among 23 witnesses depending on the importance and complexity of subjects to 24 be covered with the witnesses; 25 14. Proposed deadlines for each of the following events. In proposing deadlines, 26 the parties should keep in mind the Case Management Order will contain 27 deadlines to govern this case and once the dates have been set the court will 28 vary them only upon a showing of good cause. A request by counsel for 1 extension of discovery deadlines in any case that has been pending more than 2 two years must be accompanied by a certification stating the client is aware 3 of and approves of the requested extension. The court does not consider 4 settlement talks or the scheduling of mediations to constitute good cause for 5 an extension. The parties must propose the following: 6 a. A deadline for the completion of fact discovery, which will also be 7 the deadline for pretrial disclosures pursuant to Rule 26(a)(3). This 8 deadline is the date by which all fact discovery must be completed. 9 Discovery requests must be served and depositions noticed 10 sufficiently in advance of this date to ensure reasonable completion 11 by the deadline, including time to resolve discovery disputes. Absent 12 extraordinary circumstances, the court will not entertain discovery 13 disputes after this deadline; 14 b. Dates for full and complete expert disclosures and rebuttal expert 15 disclosures, if any; 16 c. A deadline for completion of all expert depositions; 17 d. A date by which any Rule 35 physical or mental examination will be 18 noticed if such an examination is required by any issues in the case; 19 e. A deadline for filing dispositive motions; 20 f. Case-specific deadlines and dates, such as the deadline to file a motion 21 for class certification or a date on which the parties are available for a 22 Markman (patent claim construction) hearing; 23 g. A date by which the parties shall have engaged in face-to-face good 24 faith settlement talks; 25 h. Whether a jury trial has been requested and whether the request for a 26 jury trial is contested, setting forth the reasons if the request is 27 contested; 28 i. Any other matters that will aid the court and parties in resolving this 1 case in a just, speedy, and inexpensive manner as required by Federal 2 Rule of Civil Procedure 1; 3 15. A statement indicating whether the parties would prefer that the court hold a 4 case management conference before issuing a scheduling order—and, if so, 5 an explanation of why the conference would be helpful. 6 IT IS FURTHER ORDERED the parties shall file a proposed Case Management || Order containing all the proposed dates at the same time they file the Rule 26(f) Case 8 || Management Report. The proposed Case Management Order must also be emailed in Word 9|| format to Lanham _Chambers@azd.uscourts.gov. 10 Dated this 23rd day of June, 2026. 11

Honorable Krissa M. Lanham 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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