Franchise Agreements

News & Analysis as of

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

Focused on Franchise Law - June 2014

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

Belgium: modified rules on pre-contractual information affect franchise agreements in Belgium – existing as well as future

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

Appellate Court Holds That Arbitrators Did Not Act In Excess Of Their Authority Or In Manifest Disregard Of Law In Denying Motion...

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

Québec Court of Appeal Decision Results in Significant Victory for Franchisors

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

To Be a Franchise or Not to Be….

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

Focused on Franchise Law - May 2014

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

Are Franchise Agreements Negotiable?

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

Not Every Fact Is a “Material Fact”

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

Case Law Review of Cora Decision

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

New Developments in British Columbia’s Consideration of Franchise Law

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

Focused on Franchise - April 2014

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

Here we go again: Australian government releases draft amendments to the Franchising Code of Conduct

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

Major Amendments To Franchising Code Foreshadowed: The Australian Government Has Today Released An Exposure Draft Of The...

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: Increased...more

Franchisor Liability For Franchisee Employees: Damn Weasels

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

Top franchise cases of 2013

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

Focused on Franchise Law - March 2014

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

Expanding Smart: Is Franchising Right For Your Restaurant Concept?

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

Ownership Of Competitive Franchise Systems: Risks And Rewards

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

Hotel Franchise Agreements: 8 Things To Negotiate In Your Next Franchise Agreement

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

The Advisor, Winter 2014 - Franchise Law Series: Part One

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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