The parent of Dunkin' Donuts was named along with Starbucks and about 80 other coffee sellers, distributors and retailers in a 2010 lawsuit alleging violations of California's Proposition 65 and Safe Drinking Water and Toxic...more
You may remember that several national sports franchises are under fire for trademarks and branding that is seen to be racially disparaging. The Washington Redskins are the first team to come to mind, and it wasn’t too long...more
6/26/2017
/ Disparagement ,
First Amendment ,
Football ,
Free Speech ,
Lanham Act ,
Matal v Tam ,
Music Industry ,
NFL ,
Redskins ,
SCOTUS ,
Team Mascots ,
The Slants ,
Trademark Registration ,
Trademarks ,
USPTO
Domain name registration is usually a good first step to cement trade name and mark ownership. In a previous blog we reminded readers that possession, even in Intellectual Property matters, is nine-tenths of the law...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
Franchisors collect weekly or monthly "franchise fees." In many cases, fees are for particular services, such as marketing assistance or IT support. In franchising, the parties may be in any number of different states: for...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
Among the many differences between Tesla and traditional automakers, Tesla does not sell or service its electric cars through franchised dealers; it sells direct to consumers. Recent legal challenges to Tesla'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
As independent small business operators, franchisees may qualify for business loans that are guaranteed by the Small Business Administration ("SBA loans"). However, the SBA considers certain types and levels of control...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
In last week’s election, California voters passed Prop 64, which means recreational marijuana can be sold and used by persons over 21 within the state.
But don’t get excited about the gold rush just yet. Recreational...more
11/15/2016
/ Ballot Measures ,
Brand ,
Business Development ,
Corporate Branding ,
Decriminalization of Marijuana ,
Dispensaries ,
Entrepreneurs ,
Intellectual Property Protection ,
Marijuana ,
Marijuana Cultivation ,
Marijuana Related Businesses ,
Medical Marijuana ,
New Legislation ,
Personal Brands ,
Popular ,
Retail Market ,
Retailers ,
Trademark Registration ,
Trademark Trial and Appeal Board ,
Trademarks ,
USPTO
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
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
A "non-compete" provision limits the franchisee's ability, after the franchise agreement ends, to continue to work in a similar type of business to the franchise within a certain time period and geographic area. The purpose...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