Franchise Updates

Read need-to-know updates, commentary, and analysis on Franchise issues written by leading professionals.
News & Analysis as of

Do You Know Who Your Employees Are?

Employers are beginning to learn that they may have far more employees than they think. A driver for the ride sharing company Uber was considered an “employee” by the California Labor Commissioner’s Office earlier this month....more

Eighth Circuit Upholds Arbitration Agreement In Absence Of Actual Proof Of Unconscionability Due To Cost

The Eighth Circuit affirmed a decision by the U.S. District Court for the Eastern District of Missouri which rejected the contention that an arbitration agreement was unconscionable, and unenforceable under the Federal...more

FRANCHISEE 101: Pay Now or Pay Later – Liquidated Damages & Future Royalties

Super 8 Worldwide, Inc. v. Anu, Inc. serves as a reminder to franchisees that, in general, courts will hold franchisees and their guarantors liable to their franchisors for losses suffered when franchisees abandon their...more

FRANCHISOR 101: Disclosure Violations & Running the Risks of Rescission

Despite a district court's recent decision in Braatz, LLC v. Red Mango FC, LLC, franchisors are well advised to comply with applicable disclosure requirements to a "T" to ensure new franchisees will not have an ongoing right...more

Polsinelli Podcast - Is a Single U.S. Food Agency a Reality? [Video]

In the United States, 2015 has brought forth several regulatory proposals in what has become a perpetual Washington, D.C. conversation: Why is there more than one federal agency responsible for food safety and what can and...more

Spotlight on Tennessee: 2015 Tax and Related Legislation

The 2015 Legislative Session, 109th General Assembly, considered a large number of tax and related initiatives. Many of these initiatives have been enacted, some with very far reaching impact upon the tax climate in this...more

DOL Wage and Hour Division to "Clarify" FLSA Independent Contractor Definition

The DOL’s Wage and Hour Division expanded its already busy agenda, announcing upcoming guidance on the Fair Labor Standards Act’s definition of “independent contractor.” WHD Administrator David Weil, speaking at New York...more

Asset-Light Strategy Issues in the Development Space

While asset-light strategies have been used for decades in the hotel industry, the strategy and how to implement it are a bit more complicated in the development space, whether for a hotel or time-share company. A typical...more

Tennessee Takes Shot at NLRB in New Law Limiting Franchisor Liability

Franchisors in Tennessee can breathe a small sigh of relief thanks to a newly enacted state statute that seeks to limit their potential liability and strike back at the general counsel of the National Labor Relations Board....more

What’s an Exclusive Territory?

The extent of a franchisee’s territorial rights is the subject of Item 12 of the franchise disclosure document (FDD). One of the questions franchisors must address in Item 12 is whether the territory is exclusive....more

McDonald's Mandatory Use of Payroll Cards Violates Pennsylvania's Wage Payment and Collection Law

Over 2,300 current and former employees of 16 McDonald’s franchisee locations in Pennsylvania claim that requiring the use of payroll debit cards to get paid violates the Pennsylvania Wage Payment and Collection Law (WPCL),...more

NLRB Weighs-In on Franchise Joint Employers

In late April, the National Labor Relations Board (“NLRB” or the “Board”) General Counsel’s office issued an Advice Memorandum (“Advice Memo”) (No. 177-1650-0100, available here) addressing whether a franchisor (Freshii...more

May 2015 Independent Contractor Compliance and Misclassification News Update

May 2015 was one of the busiest months for independent contractor (IC) misclassification cases in the courts and administrative agencies – no less than a dozen cases including such well-known companies as BMW, the NFL and...more

Obligation to Enforce Arbitration under FAA Policy Trumps Motion to Prevent Enforcement of “Clearly Void” Non-Competition...

On May 20, 2015, Judge Dudley H. Bowen of the United States District Court for the Southern District of Georgia, entered an order denying the Motion for Preliminary and Permanent Injunction filed by one of the plaintiffs...more

The Evolving Definition of Joint Employers

The National Labor Relations Board and various union-backed organizations are ratcheting up efforts aimed at changing the landscape of who qualifies as a joint employer. Right now, these aggressive efforts are most pronounced...more

DOJ Announces Plea Agreements with Five Major Banks for Manipulating Foreign Currency Exchange Markets

On May 20, the DOJ announced plea agreements with five major banks relating to manipulations of foreign currency exchange markets. Four of the banks pled guilty to felony charges of “conspiring to manipulate the price of U.S....more

Municipal Cable Franchise Transfer Toolkit

A cable operator generally cannot transfer control of its business or transfer its cable franchise without the prior approval of the franchising authority. This gives the franchising authority the opportunity to resolve...more

Court Compels Production of Metadata (New Jersey)

Younes v. 7-Eleven, Inc., 2015 WL 126313 (D.N.J. Mar. 18, 2015). In this franchise dispute, the plaintiffs sought the metadata from two spreadsheets and 38 documents, arguing they needed the requested metadata because...more

FRANCHISEE 101: 7-Eleven Ordered to Disclose Metadata

A federal court has ordered 7-Eleven to disclose its metadata in three franchisees' claims that they were targeted for termination for financial, political and racially discriminatory reasons. Metadata is deep down "data...more

FRANCHISOR 101: Freshii Not Joint Employer

The National Labor Relations Board ("NLRB") recently published a memo finding that Canadian fast-casual restaurant franchisor Freshii is not a joint employer of its franchisee's employees. The ruling concerns unfair labor...more

California Legislative Update

The end of the first week of June is the deadline for California bills to pass out of their house of origin. The following are significant bills affecting private-sector employers in the Golden State that have advanced to...more

A ray of light? NLRB opines franchisor is NOT a joint employer

In an opinion that caught close observers by surprise – particularly given the contemporaneous statements from the National Labor Relations Board’s General Counsel at a Senate hearing on May 14 – the NLRB’s Division of Advice...more

NLRB Chairman Pearce and GC Griffin Face Grilling by Senate Appropriations Committee

During a May 14 Senate Appropriations Subcommittee hearing to discuss the National Labor Relations Board's FY 2016 budget, NLRB Chairman Mark Pearce and General Counsel (GC) Richard Griffin indicated the Board has no plans to...more

House Financial Services Committee Mark-Up of JOBS Act Bills

On May 20th, the Committee will be meeting beginning at 10am in an open session to mark up eleven bills that relate to various capital formation and JOBS Act measures. We have reported on a number of these bills in prior...more

Aching Joints: Franchisor Avoids Liability for Franchisee's Labor Disputes

Any time an employer is involved in a franchise relationship, there are bound to be unique issues when legal disputes arise, particularly in the employment context. It is no longer surprising to see the names of any and all...more

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