Franchises

News & Analysis as of

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

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

Joint Employer Status for Franchisors Sees Some Reprieve, but not Enough yet for Celebration

We noted last year that, at the behest of its General Counsel Richard Griffin, the National Labor Relations Board was looking to recast the joint employer test under the National Labor Relations Act (NLRA) within the...more

Game-Changing Developments Threaten Franchise Business Model

The National Labor Relations Board (NLRB) and Service Employees International Union (SEIU) have been coordinating attacks on the franchise business model. These activities were a primary focus for all attendees at the May...more

New NLRB Advice Memorandum Offers Glimmer of Hope to Franchisors

On April 28, 2015, the National Labor Relations Board (NLRB) issued an advice memorandum addressing when franchisors can be considered “joint employers” with their franchisees for purposes of the National Labor Relations Act...more

Franchisees Flatline in Case Against Doctors Express

On April 1, 2015, the U.S. Court of Appeals for the Third Circuit thoroughly shot down claims brought by franchisees of Doctors Express Franchising. Those claims asserted that Doctors Express misrepresented initial start-up...more

Class Action Attempt to Void Jimmy John's Non-Competes Goes Stale

Sandwich chain Jimmy John's has been in the news lately because of non-compete agreements that employees of its franchisees sign. This is not necessarily good news for Jimmy John's, but it does underscore some interesting...more

Hospitalitas Newsletter - Spring 2015

In This Issue: - The Next Hot Trend in Economic Development: Craft Beer - Class Action Attempt to Void Jimmy John’s Non-Competes Goes Stale - Use of Customer Survey Data Upheld in Hotel Franchise...more

Georgia Supreme Court to Franchisees: Read Your Contracts!

In July 2001, sisters Michele and Lorraine Reymond approached the defendant, franchisor Legacy Academy, Inc., about the purchase of a daycare franchise to be located in suburban Atlanta. The sisters testified that Legacy...more

Use of Customer Survey Data Upheld in Hotel Franchise Terminations

In most cases, courts and state legislatures have made it more difficult for franchisors to terminate franchise agreements. However, one federal court in New York recently upheld the use of negative guest satisfaction surveys...more

Argentina's new Franchise Law: unusual and unclear

As the effective date of Argentina’s new Franchise Law approaches, businesses are beginning to comprehend its unexpected parameters. For years, franchises operating in Argentina were governed only by contract...more

Reimbursing Employees for Business Expenses: The FLSA Kickback Rule [Wage & Hour FAQs]

Over the last month, Domino’s has been in the news for some of the wrong reasons, with not one but two Fair Labor Standards Act (FLSA) class action lawsuits alleging that two large Domino’s franchisees paid delivery drivers...more

March 2015 Independent Contractor Compliance and Misclassification News Update

This past month’s headline developments involve three major developments in the area of independent contractor (IC) misclassification. The first case involves a large department store that agreed to pay most of the costs of...more

Franchising for the Greater Good

Nonprofit organizations and business franchises operate in separate worlds.  But sometimes those worlds meet in a way that can be mutually beneficial.  When the franchise benefits the mission of the nonprofit, the...more

Court Applies Concepcion And Compels Arbitration, Rejecting Claim That Agreement Precluded “Effective Vindication Of State...

In a putative class action alleging violation of Pennsylvania labor laws, unfair trade practices, and other state law claims brought by a franchisee against the franchisor and two subsidiaries, the court stayed the...more

Legal Considerations for Homebuilder Franchises

When you think of a “franchise” you probably think of fast food restaurants, car dealerships and gas stations; not homebuilders. Nevertheless, homebuilder franchises are becoming more and more popular. ...more

Fissured Employment – the Government Has Set Its Sights on You

For centuries, businesses have used subcontracting arrangements, franchise agreements or otherwise contracted out the performance of some functions third parties. The business reasons for such actions are obvious: it allows...more

Employers Must Prepare Now for Seattle’s New Minimum Wage Rate, Effective April 1

Employers with employees working within the city limits of Seattle must begin complying with Seattle’s Minimum Wage Ordinance on April 1. The new Seattle ordinance will increase the hourly minimum wage for covered employees...more

What Happens When a Franchise Agreement Ends, Part Two: Cancellation

In some cases, a franchise relationship ends after many years of business. At the point of termination, the parties must wrestle with a number of issues, including customers, inventory, and (as we reviewed in Part 1) the...more

Feds Fast-Forward "Fissured" Focus

As David Weil, the still relatively new United States Department of Labor (DOL) Wage and Hour Administrator describes it, an industry is “fissured” when large companies no longer directly employ the workers that produce their...more

California district court enforces forum selection clause against area representative

The United States District Court for the Eastern District of California recently upheld a forum selection clause in favor of a franchisor and transferred the case to the United States District Court for the Western District...more

‘Guns in Trunks’ and Franchisor Liability Highlight Proposed Tennessee Employment Law Changes

Barring the firing of an employee for legally bringing a firearm to work and liability protection for franchisors highlight the employment law proposals on the Tennessee legislature’s agenda for this year. ...more

Testing the “Joint Employer” Waters

PK Law recently reported on the filing of a complaint by the General Counsel for the National Labor Relations Board (“NLRB”) against McDonald’s Corporation to the effect that McDonald’s was a “joint employer” with its...more

Uncharted Territory: Seattle’s $15 Minimum Wage Ordinance

The City of Seattle’s Minimum Wage Ordinance is set to take effect April 1, 2015.  When it does, Seattle will have the highest minimum wage in the nation, outpacing larger metropolises like San Francisco and New York City....more

FRANCHISOR 101: California Increases Time for Automatic Effectiveness from 15 to 30 Business Days

A new California law has given the California Department of Business Oversight, the State's regulator of franchises, more time to review franchise registration and renewal applications, with the result that franchisors, their...more

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