On December 14, 2017, the National Labor Relations Board (Board) in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017) expressly overruled the divisive joint-employer standard adopted by Browning-Ferris...more
Some creativity can help in passing a former franchised business to the next generation, particularly if the franchisor has no part in the franchisee's succession plan.
A federal court in Nebraska preliminarily enjoined...more
A restaurant franchisor, World of Beer Franchising ("WOB"), recently lost an appeal to enforce a post-termination restriction against a franchisee launching a competing business. Both the trial and appellate court ruled...more
12/1/2017
/ Appeals ,
Dispute Resolution Clauses ,
Franchise Agreements ,
Franchisee ,
Franchises ,
Injunctive Relief ,
Mandatory Arbitration Clauses ,
Mediation ,
Non-Compete Agreements ,
Remedies ,
Restaurant Industry ,
Restrictive Covenants
Baskin-Robbins charges a dairy supplier a so-called "commercial factor" fee for the right to make and sell Baskin-Robbins proprietary ice cream to franchisees. The supplier's pricing to franchisees includes an amount equal to...more
A federal court in New Jersey granted a franchisor's motion to compel arbitration of disputes involving seven frozen yogurt franchises, even though the claims were subject to different arbitration provisions in different...more
11/3/2017
/ American Arbitration Association ,
Arbitration ,
Breach of Contract ,
Conflicting Proposals ,
Contract Terms ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Insolvency ,
Liquidation ,
Motion to Compel ,
Unjust Enrichment
A federal court recently held that under California law, cleaning services franchisor Jan-Pro Franchising International (Jan-Pro) was not the employer of its unit franchisees. The franchisee plaintiffs failed to show that...more
A federal court in New York denied a franchisee's motion for preliminary injunction that would have prevented its franchisor Metal Supermarkets Franchising America (MSFA) from installing technology upgrades in its stores....more
Most dealership and franchise agreements require the franchisor's prior written consent to the transfer of a business from one franchisee to another. The new franchisee is often required to sign the franchisor's then-current...more
8/31/2017
/ Assignments ,
Attorney's Fees ,
Breach of Contract ,
Coercion ,
Consent to Assignment ,
Dealerships ,
Franchise Agreements ,
Franchisee ,
Franchisors ,
Oil & Gas ,
Purchasers ,
Sellers ,
Written Consent
A franchisor's investment in brand standards, protection and control often comes at a cost when a consumer believing or claiming to believe the franchisor and franchisee are the same, seeks to hold a franchisor liable for a...more
Beer distributors can be on common footing with their franchisee counterparts in bargaining with brewers or suppliers. Depending on the jurisdiction, distributors may have protection through beer distribution statutes...more
In Los Angeles Superior Court, McDonald's claimed victory when 6,600 workers seeking $41 million in back pay and penalties came away with less than 2% of the amount sought in a claim that the fast-food giant cheated them out...more
In every Franchise Agreement, the franchisor and franchisee promise to fulfill obligations to the other. For some promises, whether or not they were performed can be a clear "yes" or "no." For example: either a franchisee...more
For a relationship to meet the legal definition of a "franchise" in some jurisdictions, the franchisor must give significant assistance to, or have significant control over, the franchisee's business. A franchisor's...more
The consequences to an unwitting franchisor can be severe when it fails to provide disclosure documents required by franchise law. Most franchise laws provide for rescission of the franchise agreement, allowing the franchisee...more
A California federal judge dealt a major blow to employees of a Bay Area McDonald's in their effort to hold the franchisor responsible for its franchisee's alleged failure to pay wages and provide meal and rest breaks. The...more
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