Franchises

News & Analysis as of

Do You Know Who Your Employees Are?

Employers are beginning to learn that they may have far more employees than they think. A driver for the ride sharing company Uber was considered an “employee” by the California Labor Commissioner’s Office earlier this month....more

Eighth Circuit Upholds Arbitration Agreement In Absence Of Actual Proof Of Unconscionability Due To Cost

The Eighth Circuit affirmed a decision by the U.S. District Court for the Eastern District of Missouri which rejected the contention that an arbitration agreement was unconscionable, and unenforceable under the Federal...more

FRANCHISEE 101: Pay Now or Pay Later – Liquidated Damages & Future Royalties

Super 8 Worldwide, Inc. v. Anu, Inc. serves as a reminder to franchisees that, in general, courts will hold franchisees and their guarantors liable to their franchisors for losses suffered when franchisees abandon their...more

FRANCHISOR 101: Disclosure Violations & Running the Risks of Rescission

Despite a district court's recent decision in Braatz, LLC v. Red Mango FC, LLC, franchisors are well advised to comply with applicable disclosure requirements to a "T" to ensure new franchisees will not have an ongoing right...more

Asset-Light Strategy Issues in the Development Space

While asset-light strategies have been used for decades in the hotel industry, the strategy and how to implement it are a bit more complicated in the development space, whether for a hotel or time-share company. A typical...more

What’s an Exclusive Territory?

The extent of a franchisee’s territorial rights is the subject of Item 12 of the franchise disclosure document (FDD). One of the questions franchisors must address in Item 12 is whether the territory is exclusive....more

San Francisco Is About to Begin Enforcing the Retail Workers Bill of Rights – Are You in Compliance?

On July 3, 2015, the San Francisco Retail Workers Bill of Rights becomes operative. This ordinance creates major changes for many companies doing business in San Francisco. Employers Affected - The law applies...more

Asset-Light

While asset-light strategies have been utilized for decades in the hotel industry, the strategy and how to implement it are a bit more complicated in the development space, whether for a hotel or time-share company. A typical...more

NLRB Weighs-In on Franchise Joint Employers

In late April, the National Labor Relations Board (“NLRB” or the “Board”) General Counsel’s office issued an Advice Memorandum (“Advice Memo”) (No. 177-1650-0100, available here) addressing whether a franchisor (Freshii...more

May 2015 Independent Contractor Compliance and Misclassification News Update

May 2015 was one of the busiest months for independent contractor (IC) misclassification cases in the courts and administrative agencies – no less than a dozen cases including such well-known companies as BMW, the NFL and...more

The Evolving Definition of Joint Employers

The National Labor Relations Board and various union-backed organizations are ratcheting up efforts aimed at changing the landscape of who qualifies as a joint employer. Right now, these aggressive efforts are most pronounced...more

Municipal Cable Franchise Transfer Toolkit

A cable operator generally cannot transfer control of its business or transfer its cable franchise without the prior approval of the franchising authority. This gives the franchising authority the opportunity to resolve...more

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

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