Franchise Agreements

News & Analysis as of

FRANCHISOR 101: Statutes of Limitation Message for Franchisors and Franchisees

In Kroshnyi v. U.S. Pack Courier Services, Inc., a case pending for 13 years (and not over yet), numerous drivers claimed their package delivery franchisor violated New York's franchise law. From 1996 to 1998 the drivers...more

FRANCHISEE 101: Avoid Acts & Omissions That Expose Your Franchisor to Potential Liability

A West Virginia Court refused to dismiss an action brought under its state workers' compensation law. That law permits an employee to recover greater damages when deliberate intent exists. An employee of a Hardee's...more

Court Denies Motion to Remand, Rejecting Application of Home State and Local Controversy Exceptions to CAFA

The plaintiff filed a putative class action in Pennsylvania state court against two Pennsylvania defendants and one Virginia defendant, claiming that the defendants preyed on non-English speakers, illegally coercing them to...more

Direct Benefits Estoppel: 7th Cir. Explains How You Can Be Compelled To Arbitrate Without Agreeing To Do So

Everyone knows that you can’t be compelled to arbitrate a dispute unless you’ve agreed to do so. But what everyone knows is sometimes wrong. There are situations in which a person has to arbitrate even though she didn’t sign...more

Counseling Licensors on the Steps They Can Take to Avoid Creating a Franchise Relationship

Tracy Mark, who has registered her company’s brand name as a mark with the U.S. Patent and Trademark Office, is successfully promoting her company’s products and services and now would like to leverage the market appeal of...more

FRANCHISEE 101: Illusory Arbitration Provisions Not Enforceable in Indiana

In 2010, Steak 'n Shake, a franchisor of hamburger restaurants, adopted new pricing and promotion policies that required all franchisees to follow company mandated pricing on every menu item and to participate in all...more

FRANCHISOR 101: Venue and Choice of Law Provisions Not Enforceable in California

In 2013, Pepe's Franchising, a U.K. company, entered into a Master Franchise Agreement with Frango Grill, based in California, granting the right to operate and franchise Pepe's restaurants in California. The Agreement's...more

Why Subfranchising is Rare in the U.S.

Subfranchising is one of three multi-unit franchise structures that the North American Securities Administrators Association, Inc. (NASAA) addressed in their Multi-Unit Commentary, which was the subject of an earlier post. ...more

California’s Governor Brown Does the Right Thing

The big news in franchising last week was a nonevent. Legislation in California that never should have become law did not become law. The credit for this nondevelopment goes to Governor Jerry Brown, who vetoed Senate Bill...more

Is Franchising The Right Model For Your Business?

Franchising is a flexible, tried and true method of distributing products and services and offers business owners an alternative avenue to expand their already successful businesses. One immediately thinks of McDonalds or...more

Governor Vetoes Proposed Changes to California Franchise Law

To the surprise of many, California Governor Jerry Brown has vetoed the proposed changes to California’s franchise laws that were discussed in our Client Alert on August 28, 2014. In his veto message, Governor Brown...more

Brand Protection: The Case for Franchisor Auditing and Enforcement of Franchise Agreement Compliance Clauses

The recent criminal prosecution of several 7-Eleven franchisees, which arose out of a criminal alien employment investigation, as well as efforts by government agencies to treat franchisors and franchisees as joint employers...more

Georgia Court of Appeals rules franchisees can assert claims for relief under Georgia’s tort statute for violating the FTC...

The Georgia Court of Appeals recently upheld a judgment entered on a jury verdict against a franchisor for violating the Federal Trade Commission’s Franchise Rule, 16 CFR Parts 436 and 437 (the FTC Rule), finding that the FTC...more

Five Tips To Launching A Franchise Program Successfully

CONGRATULATIONS! You’ve spent years building your business, developing a loyal following, and honing your operations into a replicable format. You own two, three or maybe ten different locations, all profitable, and...more

How will the 11th edition of the Uniform System affect your management agreement?

Hotel Lawyer: New Uniform System of Accounts will affect your hotel management and franchise agreements. Are you ready? Commencing January 1, 2015, the hotel industry will have a new, significantly revised set of...more

FRANCHISEE 101: Forum Selection Clauses May Be Enforceable

A recent decision in Allegra Holdings, LLC v. Davis demonstrates that courts are enforcing forum selection clauses in favor of out-of-state franchisors and against in-state franchisees, notwithstanding franchise anti-waiver...more

Franchising agreements in Italy

We live in one of the world fashion capitals, waiting every year for the new Milan fashion week as an opportunity to cover in our blog some of the top current legal issues impacting the fashion sector....more

Restrictions in Franchise Agreements Narrowly Construed

Virginia’s public policy in favor of freedom of contract is well established. It may be most conspicuously evidenced by the Supreme Court of Virginia’s increasingly narrow construction of post-contract employment restrictions...more

California About to Make Franchise Terminations Harder

A bill on the verge of becoming law in California will sharply narrow the grounds for termination of franchises in that state, and may require re-examination of the terms of franchise agreements. Existing California law bars...more

Franchising In India: Key Considerations For Franchisors Seeking To Grow Their Brands

India recently staged the largest free democratic election in world history, bringing to power the National Democratic Alliance, led by the Bharatiya Janata Par ty, and with it a fresh sense of optimism about India’s economic...more

Update on Orozco v. Plackis: was franchisor’s principal the employer of franchisor’s employee? Fifth Circuit reverses – 3...

We reported in September 2013 about Orozco v. Plackis, a case out of the United States District Court for the Western District of Texas in which the plaintiff (a cook in a franchised restaurant) filed an action under the Fair...more

Mister Softee vs. Master Softee: Non-Compete & Trademark Ice Cream Fight in the SDNY

Dimitrios Tsirkos first became a Mister Softee franchisee in the mid 1980’s. To be clear, we are talking about the ice cream truck business. Over the years, Tsirkos entered several franchise agreements with Mister Softee and...more

NLRB Lawyers Declare Franchisor to be Joint Employer

Last week, the National Labor Relations Board’s general counsel announced its position that McDonald’s Corporation can be considered a joint employer with its franchisees for purposes of unfair labor practice claims. This...more

The Franchise Tax Board’s Doing Business Legal Ruling – Ex Nihilo, Aliquid Fit

Today’s post will try to put the Franchise Tax Board’s recent Legal Ruling 2014-01 in perspective by imagining the following inquisition by the Franchise Tax Board...more

‘To Franchise, or Not to Franchise?’

Franchising can be a highly successful approach to growing a business. But entrepreneurs should weigh success stories such as those of McDonald’s, which had $28.1 billion in revenues and $5.6 billion in net income in 2013, or...more

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