Franchises

News & Analysis as of

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

The GPMemorandum, Issue 191

In this Issue: - Georgia Federal Court Rejects Franchisees' Supply Chain Kickback Claims arbit - Court Holds Nonexclusive Forum Selection Provision Is Not Barred By The Minnesota Franchise Act - Courts...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

Saladworks, LLC files Chapter 11 in Delaware

On February 17, 2015, Saladworks, LLC filed a chapter 11 bankruptcy case in Delaware. The case has been docketed as case no. 15-10327 and has been assigned to The Honorable Laurie Selber Silverstein....more

The GPMemorandum, Issue 190

In this Issue: - Court Grants Preliminary Injunction Enforcing Covenant Not To Compete Against Former Franchisee - Ninth Circuit Affirms Summary Judgment In Franchisor's Favor - Seventh Circuit Finds No...more

The Next Wave of Joint Employment Litigation

A looming surge of cases threatens to expand the joint employment doctrine and fundamentally alter the operations of franchisors, retailers, and businesses utilizing independent contractors within the four walls of their...more

The Diminishing Tip Credit: Another Reason it is becoming Harder to Comply with Wage & Hour Laws in New York

Executive Summary: On January 30, 2015, the New York State Department of Labor's ("NYSDOL") Wage Board (the "Wage Board") voted to recommend a fifty percent increase in the minimum hourly rate for tipped workers, from $5.00...more

How to Bring a Franchise Brand to the US

What’s the best way for a successful franchisor outside the U.S. to launch its brand within the U.S.?  Here is one suggested approach: You can read a more detailed explanation of this process in a paper I recently wrote for...more

Rumors Of Joint Employer Liability For Frachisors Are Greatly Exagerated

Despite the hand wringing and pontifications that franchisors will now be deemed employers or joint employers of the employees of their franchisees, that is simply not the case. The long held protections enjoyed by...more

January 2015 Independent Contractor Compliance and Misclassification Update

JANITORIAL FRANCHISE COMPANY SETTLES ITS APPEAL OF $4.8 MILLION JUDGMENT IN FAVOR OF MISCLASSIFIED CUSTODIANS. Coverall North America Inc. settled the independent contractor misclassification case filed against it by a class...more

FCC Clarifies That Competitive Cable Franchising Rules Do Not Preempt State Franchising Laws, And Affirms Application Of Its 621...

Nearly eight years after issuing its so-called “621 Order” limiting local governments’ actions and authority over competitive cable franchising, and its 2007 Second Report and Order which extended to incumbent cable operators...more

Oakland A’s May Not Move, Ninth Circuit Says

After the Ninth Circuit’s decision on January 15, 2015, Major League Baseball maintains its exemption from the antitrust laws. Since the Supreme Court established baseball’s antitrust exemption nearly a century ago in 1922,...more

Franchise and Distribution News - January 2015

TAKE ACTION NOW TO AVOID UNEXPECTED STATE TAX LIABILITIES - Traditionally, nexus for state income tax liability has required some type of physical presence or continuous contacts by the franchisor/distributor with a...more

Franchising and Liability Under the FCPA

I am often asked about franchisor liability under the Foreign Corrupt Practices Act (FCPA). Franchising has been a successful model in the US and now many corporations are looking at overseas expansion opportunities....more

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