Barry Kurtz

Barry Kurtz

Lewitt Hackman

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FRANCHISEE 101: A Perpetual Franchise

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

3/4/2017 - Contract Interpretation Contract Termination Contract Terms Franchise Agreements Franchise Fees Franchisee H&R Block Trademarks

FRANCHISOR 101: Simplification of SBA Loan Approvals

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

3/2/2017 - Contract Terms Franchise Agreements Franchisors SBA SBA Loan Program

FRANCHISEE 101: Locked In to One Approved Vendor

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

FRANCHISOR 101: Are Franchisees Your Employees?

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

12/21/2016 - Appeals Franchisee Franchisors Joint Employers Right to Control Unemployment Insurance Appeals Board

FRANCHISOR 101: Recent “Franchisor as Joint Employer” Developments

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

12/1/2016 - 7-Eleven Administrative Appointments Franchisee Franchisors Joint Employers McDonalds NLRB Presidential Elections Settlement

FRANCHISEE 101: Is It a Franchise? Yes and No

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

11/3/2016 - Dealers Franchise Agreements Franchise Investment Acts Franchisee Manufacturers Termination Rights Unfair or Deceptive Trade Practices

FRANCHISOR 101: Original Content Needed to Protect Ops Manuals

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

Special Edition: President of International Franchise Association (IFA) Visits Lewitt Hackman

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

9/19/2016 - Browning-Ferris Industries of California Inc. Employer Liability Issues Franchisee Franchises Franchisors International Franchise Association (IFA) Joint Employers McDonalds NLRB

FRANCHISEE 101: How Far Do Earnings Projections Go?

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

8/31/2016 - Appeals Damages Evidence Franchise Disclosure Document Franchisee Franchisors Jury Trial Misrepresentation Rescission

FRANCHISOR 101: Non-Competes for Franchisees’ Employees

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

8/30/2016 - Franchise Agreements Low-Wage Workers Non-Compete Agreements Restrictive Covenants Unconscionable Contracts

FRANCHISOR 101: Reducing the Risks of Joint Employer Liability

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

7/1/2016 - Franchisee Franchisors Joint Employers Joint Liability Risk Mitigation

FRANCHISOR 101: State Bills re Franchisor Joint Employer Liability

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

5/27/2016 - Employer Liability Issues Franchisee Franchises Franchisors Joint Employers New Legislation

FRANCHISEE 101: What to Do About Franchisor’s Harmful New Policies

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

FRANCHISEE 101: Understanding Merger/Integration Clauses

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

5/3/2016 - Chrysler Franchisee Franchises Fraud Integration Clauses Merger Clause Sales & Distribution Agreements

FRANCHISOR 101: Wins, Losses & Lessons in Joint Employer Liability

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

5/2/2016 - Control Test Delivery Drivers Dominos Employment Discrimination Franchisors Independent Contractors Joint Employers Vicarious Liability Wrongful Death

FRANCHISEE 101: Purposes and Limits of Non-Compete Clauses

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

3/31/2016 - Canada Franchise Agreements Franchisee Franchisors Non-Compete Agreements

FRANCHISOR 101: Protecting Interests in Preliminary Injunctions

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

3/30/2016 - Contract Termination Franchises Franchisors Preliminary Injunctions Trademark Infringement

FRANCHISOR 101: The Importance of Arbitration Provisions

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

2/26/2016 - Arbitration Agreements Contract Terms Franchise Agreements Franchisors Motion to Compel

FRANCHISEE 101: Relying on Franchisor’s Profit Projections

Most experienced franchisors know better than to make claims about profits franchisees can expect when those claims do not match the information in the franchisor's Franchise Disclosure Document. However, if a franchisor or...more

2/25/2016 - Disclaimers Franchise Agreements Franchise Disclosure Document Franchisee Fraud Misrepresentation

FRANCHISEE 101: California Expands Protections for Franchisees

California Assembly Bill 525, passed into law in 2015 applies to franchise agreements entered into or renewed on or after January 1, 2016. It expands and provides new protections for franchisees. Franchisees subject to...more

2/1/2016 - Franchise Agreements Franchisee New Legislation

FRANCHISOR 101: Department of Labor Weighs in on Joint Employer Liability

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

2/1/2016 - DOL Franchisors Joint Employers Unpaid Overtime Wage and Hour

FRANCHISOR 101: 10 Ways Franchisors Can Reduce Vicarious Liability Risks

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

12/30/2015 - Employer Liability Issues Franchise Agreements Franchisors Joint Employers McDonalds Rest and Meal Break Unpaid Overtime Vicarious Liability

FRANCHISEE 101: Pay Attention to Contractual Statutes of Limitation

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

12/29/2015 - Contract Terms Franchise Agreements Franchisee Franchisors Motion to Dismiss Statute of Limitations

FRANCHISOR 101: Catch-all Disclaimers No Substitute for Untrained Salespeople

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

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