Legal
Looking for answers to pressing legal questions about franchising? What’s keeping you up at night? Federal, state, and local laws affecting everything from minimum wage to employee scheduling are critical to managing your business successfully. Find what you need to know about today’s legal issues from top franchise attorneys.
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March 5th, 2019
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Online marketing, social media, and social commerce have created an environment that places an increased burden on franchise marketing departments.
- Keith Klein
- 9,503 Reads 931 Shares
The current "credit crisis" should not have to be a major obstacle for franchisors and franchisees seeking to expand their businesses. To reach an effective solution, it is necessary to examine the relationship paradigm between the lender, franchisor, and franchisee with a goal toward creating greater awareness and understanding of the objectives of all involved.
- Joyce Mazero And Emma Ricaurte Harker
- 5,041 Reads 130 Shares
One of the most difficult things to impress upon start-up franchisors is the amount of time, resources, and manpower it takes to establish a uniform system and, equally important, to monitor compliance with that system.
- Richard S. Mulligan
- 11,450 Reads 2,394 Shares
Franchise systems must stay dynamic, not static. Reduced recessionary spending demands introduction of new product assortments and pricing programs. Decreases in franchisees' financial performance mandates a product line adjustment. Whether driven by external or internal forces, every franchise system must be prepared to adapt to remain relevant, viable, and competitive.
- Amy Cheng
- 4,939 Reads
Many retailers are interested in building up new business by offering a deeply discounted "Groupon-like" gift certificate program. These programs market to local residents that, for example, for $25 they can get $50 worth of food at Fred's Pub. To be effective, the discounted certificate almost always has a short expiration date, a few weeks or months.
- Judith Rinearson
- 1,057 Reads 7 Shares
What is Franchise Social Media? Basically, it's more than just social media. It's the application and utilization of social media within a franchise environment. Sure, many of the same principles apply. But, franchising is different than most small business models. It's unique in many ways beyond the typical B2B or B2C model. There are specific disclosure laws that are a major part of the franchise candidate recruitment process. Even from a consumer proposition standpoint, the integrity of the entire franchise organization must be considered. And, one cannot discuss social media in a franchise environment without touching upon guidelines, policies and procedures, and brand uniformity.
- Paul R Segreto
- 12,539 Reads 2 Shares
In the previous issue, I presented observations about defects I perceived in the U.S.'s system of franchise sales regulation. The essence of my position was that having duplicative regulation at the federal and state levels adds significant costs to the regulatory system--with little improvement in the regulatory environment.
- Rupert M. Barkoff
- 5,335 Reads
Contract negotiations are usually about the relative value of "things." Each party seeks the highest value for their "thing" while downplaying the value of the other's "thing." Negotiations around those "things" are particularly difficult in international franchise transactions where relationships can span generations, territories can include entire countries, and the franchisor's system is at the core of the franchisee's business. In other words, the franchisee will set out to build an empire on a foundation it only borrows from the franchisor. That fact critically shapes the parties' negotiations.
- Michael Daigle
- 4,602 Reads 36 Shares
The onset of social media may have taken some by surprise, and others may have written off its arrival anticipating an equally quick departure. Whichever it may be, social media is not a passing fad and should be recognized as an integral part of marketing.
- Keith D. Klein
- 2,539 Reads 7 Shares
Are you someone who would you like to know the calorie count of that scrumptious three-layer cake at your favorite restaurant? Even if you're not, menu labeling is now a fact for U.S. restaurant-goers and many restaurant operators alike under the new national health care law, the Patient Protection and Affordable Care Act. Section 4205 of the Act, signed into law March 23, 2010, sets new federal requirements for nutritional labeling of foods sold at "chain retail food establishments."
- Regina Amolsch
- 1,782 Reads 15 Shares
For many franchisors with a December 31st fiscal year, now is the time to start preparing to renew their franchise documentation. The FTC rules require that the franchise disclosure document (FDD) must be updated within 120 days of the expiration of a franchisor's fiscal year. Registration states, such as New York, have an identical requirement. As a franchisor prepares to do so, that process presents an opportunity to review and improve franchise documentation, particularly the franchise agreement.
- Terrence M. Dunn
- 3,758 Reads 127 Shares
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Franchisors and franchisees who accept credit or debit cards as payment from consumers are familiar with--and likely disdainful of--the fees that card issuers and banks charge for those transactions. The largest component of these fees are called "interchange fees," which are fees that card-issuing banks charge to a merchant or retailer's bank in exchange for processing the transaction. Interchange fees (along with other small fees) are then passed along to the retailer or merchant. In this way, interchange fees affect the prices that many businesses charge to consumers for goods and services.
- Michael Laidhold
- 2,057 Reads 48 Shares
U.S. franchisor interest in Asia seems to be at an all-time high, yet from a legal compliance standpoint it has never been more difficult to enter into many of the various Asian markets.
- Robert A. Lauer
- 6,982 Reads 966 Shares
Like it or not, litigation comes to virtually all franchise systems. Take a moment to see how savvy you are on franchise litigation issues based on real-world cases.
- Jonathan Solish
- 4,975 Reads 410 Shares
As savvy franchise companies continue to flourish in this challenging economy, FUSR will continue to bring you good news each month, highlighting brands that are adding units, increasing comp store sales, striking deals with investors, and continuing to grow despite the economy - maybe even because of it. And, as the U.S. struggles through its "jobless recovery," growth-oriented franchisors continue to look overseas for expansion opportunities.
- Franchise Update
- 4,689 Reads 93 Shares
There is an open debate among attorneys over the value of using social media (blogs, Facebook, LinkedIn, and Twitter predominantly) and even websites to generate business for themselves.
- Terrence M. Dunn
- 2,735 Reads 17 Shares
I begin this column by stating where I am going with this piece. I am going to put franchise sales legislation and regulation under the microscope, and ask the penetrating question of whether it is, or is not, necessary. (Similar questions should be asked about franchise relationship legislation, but I will leave that for a future column.)
- Rupert M. Barkoff
- 2,689 Reads 17 Shares
Over the last several years, a number of jurisdictions have enacted legislation requiring chain restaurants to disclose caloric content and other information regarding their foods. Most commonly, caloric content must be placed on the menu board or menu near the corresponding food item
- Anthony Marks
- 1,014 Reads 3 Shares
Gift cards can be an important component of customer loyalty programs. They can help attract customers, driving sales and brand awareness. New federal rules governing the use of gift cards have recently gone into effect. You certainly should be aware of and comply with the new laws.
- Jan Gilbert and Suzie Loonam Trigg
- 6,869 Reads 198 Shares
In the race to boost sales in a tight economy, franchisors are offering many different kinds of financial incentives to attract potential franchisees and to help their existing franchisees survive and expand. Last month, the authors provided an overview of today's economic environment, along with details on what Chick-fil-A, Saladworks, and Friendly's are doing to help franchisees obtain the funding they need. This month, they describe the programs under way at five more franchisors.
- Lane Fisher and F. Joseph Dunn
- 4,038 Reads 124 Shares
The franchising community thinks of the FTC as the "top dog" in regulation. The FTC's Franchise Rule sets the standard for disclosure to prospective franchisees and is the basis of state regulation as well. While small by federal standards, the FTC has powerful tools at its disposal.
- David W. Koch
- 1,264 Reads 10 Shares
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In the previous issue of Franchise Law News, Terrence Dunn and Michael Einbinder authored an article on how to strengthen your franchise agreement. This article expands on that theme, focusing on the role of the franchise agreement in the franchise system.
- Brian Schnell
- 2,698 Reads 25 Shares
All franchisors are considering how to maintain or increase market share in the new normal. Nobody can deny that the Great Recession has created more and better real estate opportunities for those who can afford to exploit them, as well as a surplus of qualified operators, composed increasingly of women and minorities, without assets to operate. The number of opportunities appears to grossly overshadow any one franchisor's resources in terms of cash, personnel, and credit.
- Lane Fisher and F. Joseph Dunn
- 4,849 Reads 134 Shares
Last year when President Obama signed the Credit Card Act of 2009 (the Act") into law, the nation's attention largely focused on those provisions of the law that aim to change the way credit card companies do business with consumers. However, since the Act imposes requirements on gift card issuers, it also changed the way many retailers and franchise companies will do business with consumers.
- Jan Gilbert and Suzie Loonam Trigg
- 3,656 Reads 25 Shares
As I write this piece, it is a nostalgic moment for me: 37 years of practicing law, and all with the same firm. In today's environment, inertia in law firm employment is a rare thing. If I knew then what I know today, would I have gone into private practice?
- Rupert M. Barkoff
- 2,493 Reads 12 Shares
One of the significant consequences of the Internet's development is that we can gather opinions from a diverse group with minimal effort. I did so recently through a posting on the American Bar Association Forum on Franchising listserv.
- Rupert M. Barkoff
- 88,542 Reads 153 Shares
When the topic of international franchising comes up with clients, many are quick to dismiss the opportunities. Comments such as, "I haven't sold out the U.S. yet," are common. Some franchisors take a more inquisitive approach and ask, "What's it going to cost me?" Others want to know how quickly they can open because they want the initial fee or want to go there on vacation
- Jeffrey A. Brimer
- 6,090 Reads 610 Shares
Franchisors typically have developed franchise agreements that have been tailored by time and experience to address the issues that most often arise in the development of their franchised businesses. However, even the most polished agreement can benefit from a periodic review and revision. Here are five areas that frequently require attention to enhance enforcement rights, protect against competition, protect intellectual property, and protect against claims by third parties.
- Terrence Dunn and Michael Einbinder
- 2,790 Reads 107 Shares
In January 2007, the FTC released the amended FTC Rule on Franchising and made compliance mandatory by July 1, 2008. Since then, many of the states with franchise registration laws have also amended their laws to conform to the FTC's changes. Violations of the FTC Rule and state franchise laws can have a profound negative impact on a franchisor, its officers, directors, and sales staff, and can even lead to jail time. We thought we would take this opportunity, more than three years after the release date, to offer you a short quiz to gauge how well you remember some of the important current requirements.
- Kenneth R. Costello
- 6,514 Reads 488 Shares
Last issue, we discussed growth through nontraditional franchises. Private equity firm investments of significant amounts of capital in franchisors and in franchisees represent another avenue for sales growth. Economic travails have led to the availability of sites with increased negotiating leverage for prospective tenants and experienced franchise talent. But in this tight financial market, where are the dollars to take advantage of those opportunities? We explore private equity firm concerns, what to expect in negotiations, and when franchisors should "just say no."
- Jan Gilbert and Gayle Cannon
- 2,803 Reads 39 Shares
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