Franchises

News & Analysis as of

Why Subfranchising is Rare in the U.S.

Subfranchising is one of three multi-unit franchise structures that the North American Securities Administrators Association, Inc. (NASAA) addressed in their Multi-Unit Commentary, which was the subject of an earlier post. ...more

Franchise Legislation October 2014: The Latest Word on Franchise Legislation in British Columbia

British Columbia continues along the path towards franchise legislation, albeit at a glacial pace. In late March, the British Columbia Law Institute (BCLI), a law reform research organization, published its Report on a...more

Businesses Anxiously Await NLRB Decision on Joint Employer Standard

Many are up in arms following a memorandum issued by the General Counsel of the National Labor Relations Board (NLRB) authorizing employees of a national restaurant chain to argue that the franchisor is jointly responsible...more

California’s Governor Brown Does the Right Thing

The big news in franchising last week was a nonevent. Legislation in California that never should have become law did not become law. The credit for this nondevelopment goes to Governor Jerry Brown, who vetoed Senate Bill...more

Franchisors Are Not Joint Employers

The National Labor Relations Board (NLRB) caused an earthquake in the field of franchising with the General Counsel’s announcement July 29, 2014, of complaints against McDonald’s USA, LLC....more

How to Disclose Multi-Unit Franchise Offerings

Multi-unit franchising is a good way to grow a franchise system quickly. We now have guidance on how franchisors should present multi-unit franchise offerings....more

EEOC Ramps Up Attack On Mandatory Arbitration Agreements

Over the course of its history, the U.S. Equal Employment Opportunity Commission (“EEOC”) has disfavored the application of mandatory arbitration agreements within the employment context. Indeed, until the decision in...more

Is Franchising The Right Model For Your Business?

Franchising is a flexible, tried and true method of distributing products and services and offers business owners an alternative avenue to expand their already successful businesses. One immediately thinks of McDonalds or...more

Fifth Circuit Allows Title VII Suit Against Franchisor to Proceed Even Though It Was Not Named in EEOC Charge

In order to sue under Title VII, plaintiffs must first file an administrative charge of discrimination against their employer with the Equal Employment Opportunity Commission. In many cases, the charge misnames the actual...more

Governor Vetoes Proposed Changes to California Franchise Law

To the surprise of many, California Governor Jerry Brown has vetoed the proposed changes to California’s franchise laws that were discussed in our Client Alert on August 28, 2014. In his veto message, Governor Brown...more

Oklahoma Chicken Express Franchiser to Pay $15,000 to Settle EEOC National Origin Discrimination Suit

Restaurants Exploited Class of Hispanic Cooks by Failing to Pay Overtime, Federal Agency Charged - OKLAHOMA CITY, Okla. - NSC Chicken, LP, dba Chicken Express, will pay $15,000 and furnish other relief to settle a...more

Brand Protection: The Case for Franchisor Auditing and Enforcement of Franchise Agreement Compliance Clauses

The recent criminal prosecution of several 7-Eleven franchisees, which arose out of a criminal alien employment investigation, as well as efforts by government agencies to treat franchisors and franchisees as joint employers...more

Georgia Court of Appeals rules franchisees can assert claims for relief under Georgia’s tort statute for violating the FTC...

The Georgia Court of Appeals recently upheld a judgment entered on a jury verdict against a franchisor for violating the Federal Trade Commission’s Franchise Rule, 16 CFR Parts 436 and 437 (the FTC Rule), finding that the FTC...more

Five Tips To Launching A Franchise Program Successfully

CONGRATULATIONS! You’ve spent years building your business, developing a loyal following, and honing your operations into a replicable format. You own two, three or maybe ten different locations, all profitable, and...more

Domino’s Delivers Key Ruling in Favor of Franchisors

The California Supreme Court recently issued an important victory for franchisors, finding that a franchisor does not stand in an employment or agency relationship with the franchisee and its employees for purposes of holding...more

Employment Flash - September 2014

In This Issue: - SEC Pays First Whistleblower Award to Audit and Compliance Professional - Supreme Court Allows Affordable Care Act Contraceptives Religious Exemption - EEOC Adopts New Pregnancy...more

Joint Employers Under NLRB Law

A. Introduction - Over the last few weeks, there has been a great deal of discussion in the legal media regarding the National Labor Relations Board (NLRB or Board) General Counsel’s (GC) argument to the Board, that...more

Employment Law Summer Recap 2014: Part 10 of 11 – Derek Jeter and Big Macs: What Will Happen to Their Franchises Now?

Sadly, for this writer, Yankee legend Derek Jeter’s playing days have come to a close. This summer we were able to watch the Captain and five-time World Series Champion take the final swings of his illustrious career where he...more

Restaurant Industry Newsletter - September 2014

Restaurant Franchisors Targeted by NLRB and DOL for Claims They are Joint Employers of Franchisees' Employees- Restaurant franchisors are facing efforts from both the National Labor Relations Board (NLRB) and the U.S....more

Ninth Circuit Weighs in on When Franchisors May Be Liable for Franchisees' Unlawful Text Messaging Campaigns

In Thomas v. Taco Bell Corp.,[3] a franchisee association planned a promotion in which text messages were sent to 17,000 people in the Chicago area to promote a local sweepstakes contest. The lower court dismissed the case...more

Twelve Tips for Franchisors to Reduce Joint Employer Risks Under Today's Legal Standards

Franchise agreement recitals declaring your franchisee to be an independent contractor, not an employee, are not dispositive! Until now, the spotlight has never shined so brightly on franchising and, specifically, on...more

Are You a Co-Employer? FMLA Joint Employer Liability Can Be Deadly

To be covered by the FMLA, a private employer must employ at least 50 employees within a 75-mile area. If the employer doesn’t meet this threshold, it is not obligated to provide FMLA leave to its employees. However, an...more

Putative Class Members Not Lovin’ It – Court Denies Conditional Certification of Supersized McDonald’s FLSA Class of More Than...

McDonald’s, the fast food giant known for supersizing its orders, avoided conditional certification of an FLSA collective action this week based on the “very large” size of the putative class. The Eastern District of Michigan...more

FRANCHISEE 101: Forum Selection Clauses May Be Enforceable

A recent decision in Allegra Holdings, LLC v. Davis demonstrates that courts are enforcing forum selection clauses in favor of out-of-state franchisors and against in-state franchisees, notwithstanding franchise anti-waiver...more

NLRB Pushing for a Joint Employer Liability Model for Franchisors?

In a move that has caused great concern in the franchising industry, in pending cases filed by employees against McDonald's franchisees, the National Labor Relations Board (NLRB) has authorized the filing of complaints...more

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