When a franchisee "buys into" a franchise system by paying an "initial franchise fee," the franchisee is typically purchasing the right to use the franchisor's trademarks and business system for an initial term that lasts a...more
Franchisors often require franchisees to purchase supplies, materials, or inventory only from suppliers the franchisor approved. But where franchisors see benefits of consolidating by requiring franchisees to participate in...more
12/22/2016
/ Antitrust Violations ,
Civil Conspiracy ,
Conflicts of Interest ,
Contract Terms ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Lock-Up Requirements ,
Market Manipulation ,
Price Inflation ,
Supply Contracts ,
Vendor Contacts
Prudent franchisors have been reducing their apparent control over franchisees' employees to reduce the risk of becoming joint employers of those employees. But could a franchisor's control over the franchisees themselves be...more
In the last month, McDonald's settled a class action with employees of a franchisee, and a new President of the United States was elected. These two events have something in common with regard to franchising: they are...more
A federal court in Indiana made an interesting decision on whether a business relationship was a franchise. Wabash National Corp. is a famous maker of semitrailers. Wabash notified a dealer in Texas that its dealership was...more
For more than 55 years, the International Franchise Association has been committed to improving methods and business practices for all participants in franchising - whether working with the Federal Trade Commission, lobbying...more
A franchisor is allowed to make "financial performance representations" in its disclosure documents. These figures may project how much money a franchisee is likely to make and can play a critical part in the franchisor's...more
The California Department of Business Oversight ("DBO") recently issued three Orders against franchisors for violating California's franchise laws....more
7/28/2016
/ Attorney General ,
Compliance ,
Department of Business Oversight ,
Franchise Agreements ,
Franchise Disclosure Document ,
Franchise Fees ,
Franchisee ,
Franchisors ,
Joint Employers ,
Labor Law Violations ,
Material Violation ,
Order to Desist and Refrain ,
Penalties ,
Registration Requirement ,
Unregistered Franchises ,
Wage Theft
With the risk of franchisors being jointly liable for obligations to franchisee employees, and franchisees exposed to unionization of employees if their franchisor is a joint employer, we present this list of 68 steps every...more
With franchisors deeply concerned about joint liability for franchisee employees, more states are passing laws trying to prevent that from happening. Here are some states and measures that have passed:
Texas enacted...more
Franchisees aren't always excited when their franchisor introduces a new policy. But if a new policy overreaches and might doom a franchisee's business, can it be stopped before it starts?...more
5/26/2016
/ Breach of Contract ,
Cell Phones ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Franchisors ,
Irreparable Harm ,
Performance Incentives ,
Preliminary Injunctions ,
Royalties ,
Sales Commissions ,
Unfair or Deceptive Trade Practices ,
Unjust Enrichment
Before a final agreement is signed there are often oral discussions, negotiations, and representations. There may be written memorandums of understanding or letters of intent. But, when the final agreement has a "merger" or...more
Many franchise agreements have "non-compete clauses", which state that after termination or expiration of the franchise agreement, the ex-franchisee may not operate a business that is similar to or that would compete with the...more
Most experienced franchisors know better than to make claims about profits franchisees can expect when those claims do not match the information in the franchisor's Franchise Disclosure Document. However, if a franchisor or...more
California Assembly Bill 525, passed into law in 2015 applies to franchise agreements entered into or renewed on or after January 1, 2016. It expands and provides new protections for franchisees. Franchisees subject to...more
Many franchise agreements include a contractual limitation period or time limit when parties can bring a claim for relief. Though the franchise agreement is often written by and for the franchisor, these limitations can help...more
How strong are "non-reliance disclaimers" or "integration" or "merger" provisions in franchise agreements at protecting a franchisor when it really matters? Only so much, a New York court recently decided....more
10/30/2015
/ Catch-All Disclaimers ,
Disclosure Requirements ,
Franchise Disclosure Document ,
Franchise Sales Act ,
Franchisee ,
Franchisors ,
Fraudulent Inducement ,
Merger Agreements ,
Mergers ,
Non-Reliance Clauses ,
Salespersons
At one time or another, many people have occasion to be renters who feel mistreated by a landlord. This may be due to delays in repairs, responses, or just turning on the heat. A typical reaction is the temptation to...more
10/29/2015
/ Commercial Leases ,
Dunkin' Donuts ,
Franchise Agreements ,
Franchise Fees ,
Franchisee ,
Franchisors ,
Injunctions ,
Renovations ,
Site Plans ,
Trademark Infringement ,
Trademarks
Rob & Bud's Pizza ("R&B") is a Papa Murphy's franchisee and owns and operates multiple Papa Murphy's Take 'n' Bake Pizza restaurants in Arkansas, Missouri and Kansas. In April 2014, R&B and other Papa Murphy's franchisees...more
An arbitration panel in Florida found that a disaster recovery and remediation business franchisee breached his agreement with John Woods, his franchisor, by terminating the agreement 13 years before expiration of the 20-year...more
A long-standing distributor and licensee of Harley-Davidson motorcycles in Hawaii was entitled to proceed on its claim that the business relationship with Harley-Davidson Motor Company, Inc. was a "franchise" under Hawaii's...more
A federal court in Florida has ruled that a disclaimer of representations contained in the franchise agreement between a childcare business franchisor and its franchisees barred claims against the franchisor for alleged...more
Super 8 Worldwide, Inc. v. Anu, Inc. serves as a reminder to franchisees that, in general, courts will hold franchisees and their guarantors liable to their franchisors for losses suffered when franchisees abandon their...more
Despite a district court's recent decision in Braatz, LLC v. Red Mango FC, LLC, franchisors are well advised to comply with applicable disclosure requirements to a "T" to ensure new franchisees will not have an ongoing right...more
A federal court has ordered 7-Eleven to disclose its metadata in three franchisees' claims that they were targeted for termination for financial, political and racially discriminatory reasons. Metadata is deep down "data...more