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
An important part of the franchise system is the confidential operating manual. Many franchisors claim protection of operating manuals under the law of trade secrets and copyright.
Keeping the contents confidential is...more
11/2/2016
/ Breach of Contract ,
Confidential Business Information (CBI) ,
Copyright ,
Copyright Infringement ,
Copyright Registration ,
Franchises ,
Franchisors ,
Intellectual Property Protection ,
Operating Agreements ,
Policy Manuals ,
Popular ,
Trade Secrets
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
As joint employer liability continues to develop, plaintiffs seeking deep pockets continue to claim, with some success, that franchisors are joint employers, responsible for actions of their franchisees' employees. In April,...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
A franchisor in a termination dispute with a franchisee may request a preliminary injunction to force the franchisee to immediately stop operating the franchised business and using the franchisor's trademarks and intellectual...more
Though some of the more important terms may appear early in a franchise agreement, some key terms placed near the end - the portion of the agreement that is often called "boilerplate" - may determine who wins or loses a legal...more
Recently, some plaintiffs - employees of franchisees - have tried to hold franchisors responsible for unpaid overtime and other claimed violations by franchisees they work for. They use the theory that franchisors are their...more
The U.S. Department of Labor says McDonald's is liable for actions of franchisees. In the last three months a California federal court said McDonald's could be liable for a franchisee's alleged failure to pay overtime and...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
Too often, expansion-minded business owners choose to offer trademarked products or services through purported licensing agreements or distribution or dealership arrangements only to discover, well into the game, that what...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
The National Labor Relations Board ("NLRB") recently published a memo finding that Canadian fast-casual restaurant franchisor Freshii is not a joint employer of its franchisee's employees. The ruling concerns unfair labor...more
A federal court in Sacramento recently upheld a franchisor's forum selection clause and transferred an action brought by an area representative to the federal district court in the Western District of Texas....more
A new California law has given the California Department of Business Oversight, the State's regulator of franchises, more time to review franchise registration and renewal applications, with the result that franchisors, their...more
Almost everyone recognizes the nation's most prominent franchises: McDonald's, Domino's, Hilton or 7-Eleven, to name a few. And business people are becoming aware that arrangements that look like franchises, but are...more