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Feature Story:

California Amends Its Franchise Relationship Law »

By Cheng Cohen

On October 11, 2015, California's governor signed into law a bill amending the California Franchise Relationship Act (CFRA). Here is what you need to know about the amendments.

1) The amendment applies only to agreements executed or renewed on or after January 1, 2016.
Note: Unless the franchise is of indefinite duration and can be terminated by either party without cause.

2) The amendment is designed to provide franchisees greater protection against termination.
The amendment affects the franchisor's ability to terminate in two important ways. First, with certain exceptions discussed below, it increases the required cure period from 30 days to at least 60 days (but no more than 75 days unless the parties separately agree to a longer cure period)...

Feature Story:

Avoiding Litigation Over System Changes »

By Cheng Cohen

Franchised brands are increasingly focused on implementing significant system changes. This trend is largely driven by maturing brands whose "makeovers" are necessary to keep the brand attractive and relevant, and by technological advances that are essential to operating efficiencies.
 
The biggest hurdle to system change often is franchisees who balk at the cost and time involved in making the change. Several recent lawsuits illustrate that when this happens there is a real risk of becoming embroiled in resource-draining litigation.

For example, Wendy's recently brought suit against its fourth-largest franchisee, who had challenged Wendy's right to require extensive remodeling to its restaurants and upgrades to the POS system...


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Franchise Update Magazine

Issue III, 2016

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