News & Analysis as of

Franchisee

Franchisor Not Liable For Franchisee’s Tip Policy That Allegedly Violated Massachusetts Law

The Massachusetts Superior Court has recently issued a favorable opinion to franchisors under the Massachusetts Tips Act. In Yarpah v. Bowden Hospitality Newton, LLC d/b/a Crowne Plaza Hotel, Justice Kenneth W. Salinger held...more

Jan-Pro International Is Not The “Employer” Of Its Franchisees And Did Not Commit Wrongdoing, Court Finds

On May 24, a federal judge in California polished off a three-state win by master franchisor, Jan-Pro Franchising International, Inc., finding that under California law, unit franchisees (subfranchisees) who had franchise...more

FRANCHISEE 101: Contract Curveballs

by Lewitt Hackman on

In every Franchise Agreement, the franchisor and franchisee promise to fulfill obligations to the other. For some promises, whether or not they were performed can be a clear "yes" or "no." For example: either a franchisee...more

When are Parent Company Financial Disclosures Required?

by LeClairRyan on

A franchisor selling franchises in the U.S. must disclose its audited financial statements in Item 21 of the franchise disclosure document (FDD). Sometimes, parent company financials are used instead of the franchisor’s...more

Franchising Update

by K&L Gates LLP on

Many franchisors and other participants in the franchising sector are anticipating with concern the outcome of The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Bill) which was introduced into the Federal...more

FRANCHISEE 101: Special Delivery

by Lewitt Hackman on

For a relationship to meet the legal definition of a "franchise" in some jurisdictions, the franchisor must give significant assistance to, or have significant control over, the franchisee's business. A franchisor's...more

Tesla “Franchisee” Thwarted in Utah

by Fox Rothschild LLP on

Tesla, the electric vehicle automaker, recently lost a round in the Supreme Court of Utah. Tesla set up a wholly-owned subsidiary called “Tesla UT” that was to hold a license to sell Tesla’s cars to the public. The Utah...more

NLRB Ruling on Joint Employers Should be Reversed, Congressional Republicans Urge

by Jackson Lewis P.C. on

Two years after the National Labor Relations Board’s decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), which overturned 30 years of precedent, 57 members of Congress, mostly Republicans,...more

Will Florida Cease to be the “Sunshine State” for Franchising? (Part 2/2)

by Fox Rothschild LLP on

Today, we continue our look at proposed changes to Florida’s franchise laws, including proposed changes in transferring franchised businesses, franchisor repurchase obligations and other miscellaneous changes...more

Will Florida Cease to be the “Sunshine State” For Franchising? 1/2

by Fox Rothschild LLP on

Two state legislators from Florida recently introduced a bill entitled “Protect Florida Small Business Act” (the “Act”), which could actually have the exact opposite effect on franchise relationships in Florida. While many...more

FRANCHISEE 101: Technical Disclosure Violations

by Lewitt Hackman on

The consequences to an unwitting franchisor can be severe when it fails to provide disclosure documents required by franchise law. Most franchise laws provide for rescission of the franchise agreement, allowing the franchisee...more

FRANCHISOR 101: Ostensible Agency Victory

by Lewitt Hackman on

A California federal judge dealt a major blow to employees of a Bay Area McDonald's in their effort to hold the franchisor responsible for its franchisee's alleged failure to pay wages and provide meal and rest breaks. The...more

Monthly Update—Australian Labour & Employment - February 2017

by Jones Day on

MESSAGE FROM THE EDITOR - In this edition of the Update, we discuss two significant developments that are likely to have far-reaching impacts for employers and employees across Australia. First, we discuss the proposed...more

Good news for franchisors from the U.S. Department of Labor?

We write to alert our clients and contacts about some positive comments made by the acting Solicitor General pertinent to franchise entities. Specifically, as reported today in Law 360, acting Solicitor General Nicholas Geale...more

Superior Court of Québec Confirms Validity of Percentage Royalties Paid by Pharmacist-Owners to Franchisor

The Superior Court of Québec (Court), presided by Justice M. Monast, recently ruled on an important point of contention for franchise pharmacies, by confirming the validity of a percentage royalty clause contained in a...more

FRANCHISEE 101: A Perpetual Franchise

by Lewitt Hackman on

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

BC Franchise Laws Come Into Effect

by Dickinson Wright on

On February 1, 2017, the British Columbia Franchises Act and Regulations came into effect making British Columbia the sixth province in Canada with franchise legislation. The introduction of franchise legislation in British...more

Now in Effect: British Columbia’s Franchises Act

On February 1, 2017, British Columbia’s Franchises Act (B.C. Act) and Franchises Regulation (Regulation) came into force. Although the B.C. Act follows other provincial franchise legislation closely, including with respect to...more

The Franchise Disclosure Document – A Brief Primer

The scenario: You operate a prosperous business and believe that the concept can be successful in other markets. But given financial constraints or otherwise, you determine that franchising the business will likely result in...more

Franchise Issues in Commercial Leases

Commercial landlords and tenants are already faced with many issues during the course of negotiating a commercial lease agreement. When the tenant is a franchisee, the franchisor’s requirements (as outlined in the franchise...more

Be Aware of Possible Joint Employer Status with Franchisor

The franchise model is built upon the idea that a franchisee pays for the right to use a franchisor’s brand, marketing and goodwill in launching and operating the franchisee’s business. The franchisee is generally responsible...more

Ostensible Agency, Hold the Class Certification: Would You Like Franchise With That?

by Seyfarth Shaw LLP on

It’s a common business model in the fast-food industry: a massive restaurant company provides the menu, the marketing—including catchy slogans and a universally recognized logo—and the basic operational standards for the...more

Drafting Franchise Agreements After Patterson v. Domino’s : Avoiding the Minefield of Vicarious Liability and Joint Employment

by Snell & Wilmer on

Lauded as one of the most important franchise cases in the recent past, Patterson v. Domino’s established a new standard for addressing vicarious liability issues in California. In reaching its decision that Domino’s was not...more

FRANCHISEE 101: Locked In to One Approved Vendor

by Lewitt Hackman on

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

FRANCHISOR 101: Are Franchisees Your Employees?

by Lewitt Hackman on

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

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