Before committing to a franchise business, consider...
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
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
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
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
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
FRANCHISEE 101: Unsigned Franchise Agreement Binds Franchisee's Shareholder -
Texas Appeals Court recently held in Pritchett v. Gold's Gym Franchising, LLC that a Texas forum-selection clause in a Franchise Agreement...more
Book X of the Belgian Economic Code concerning agency agreements, commercial collaboration agreements and distribution agreements is now in force. All franchisors will be affected, but those with existing franchise...more
The Ninth Circuit Court of Appeals affirmed a district court’s denial of a motion to vacate an arbitration award issued in a dispute between the Johnsons and Wetzel’s Pretzels, concerning the termination of a franchise...more
In a victory for franchisors, the Québec Court of Appeal confirmed the application of the doctrine of the indivisibility of contracts in a franchise context, supporting significant retroactive royalty awards for breaches of...more
When starting a new business, many people toy with the idea of opening a franchised business.
What is a franchise, exactly? Legally speaking, a franchise has three components: 1) license of trademarks and systems, 2)...more
FRANCHISOR 101: When is Unreasonable, Reasonable?
Crown Imports, LLC (Crown) imports Corona beer from Mexico. In 2008, two of Crown's Southern California distributors, Classic and HBC, agreed that Classic would buy...more
In theory, yes, franchise agreements are negotiable. In practice, they may not be negotiable – particularly in ways that are meaningful.
Every franchisor has a form of franchise agreement that defines the rights and...more
Canadian franchise laws require that all material facts relating to the franchise be included in a franchise disclosure document. After more than 10 years of judicial interpretation and application of franchise laws, many...more
A decision was recently made in the 2176693 Ontario Ltd. v. Cora Franchise Group case that reinforces that franchisee rights under Ontario’s Arthur Wishart Act (Franchise Disclosure), 2000 (the AWA) cannot be readily released...more
On March 31, 2014, the British Columbia Law Institute (BCLI), a law reform research organization, published its Report on a Franchise Act for British Columbia (the Report). The Report was divided into two parts: Part one...more
FRANCHISEE 101: Terminated Franchisee Can Pursue Fraudulent Disclosure Claims -
In Solanki v. 7-Eleven, Inc., a U. S. District Court in New York ruled that a terminated 7-Eleven franchisee who decided to purchase a...more
The Australian government has released an exposure draft of amendments to The Trade Practices (Industry Codes – Franchising) Regulations 1998 (the Franchising Code of Conduct) and relevant provisions in the Competition and...more
Stakeholders are invited to comment on the draft bill and Regulations by 30 April 2014 with the changes expected to take effect from 1 January 2015. The highlights of the amended Regulations include:
Weasel words, not epithets for employees with legal claims, are the problem. “…[C]ourts have been nearly uniform in holding that a franchisor should not be deemed to be an ‘employer’ … when plaintiff works for an...more
1. In Hanley v. Doctors Express Franchising, LLC, a former franchisee of the Doctors Express franchise system sued Doctors Express, the franchisor, and Rhino 7, a broker involved in the franchise sale, asserting that the...more
FRANCHISOR 101: Franchisee Not Bound by Arbitration Provision -
In March 2013, Edison Subs, LLC, a Subway franchisee/transferee, filed a complaint in New Jersey against Subway and Aliya Patel (the original...more
The franchise model can offer restaurateurs plenty of upside, which is precisely why franchise restaurants blanket the country. As growth vehicles go, however, franchising works better for some concepts than for others. Is...more
Franchise systems have been, and continue to be, sought-after investment and acquisition targets. As a result of this, the demand for ownership of franchise systems often exceeds supply. In fact, there has been almost a...more
Most branded hotel properties are operated under franchise agreements which are long documents with lots of fine print. They are usually presented to owners as "non-negotiable." This brand position is justified on the basis...more
A “Pet Valu” franchisee in Ontario claimed that sales were declining, so the owner tried to escape her franchise agreement. After termination of the agreement, her husband established a competing “Pet Stuff” business nearby....more
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