Franchises

News & Analysis as of

“Would You Like Joint-Employer Liability With That?” McDonald’s Serves as a Cautionary Tale for Franchisors and Other Potential...

The National Labor Relations Board Office of the General Counsel has investigated charges alleging McDonald’s franchisees and their franchisor, McDonald’s, USA, LLC, violated the rights of employees as a result of activities...more

Franchise arrangements pose legal problem for NLRB’s proposed joint-employer standard

The National Labor Relations Board’s general counsel, who is recommending that the Board dramatically alter the joint-employer doctrine, admitted that his proposal may run into “a problem legally” when it comes to...more

Game changer – the proposed Joint Employer standard

The US National Labor Relations Board, Department of Labor and Equal Employment Opportunity Commission have launched a coordinated prosecutorial assault on businesses that use outsourcing, franchising or sub-contracting. The...more

FRANCHISEE 101: Avoid Acts & Omissions That Expose Your Franchisor to Potential Liability

A West Virginia Court refused to dismiss an action brought under its state workers' compensation law. That law permits an employee to recover greater damages when deliberate intent exists. An employee of a Hardee's...more

FRANCHISOR 101: Avoid Liability for Acts and Incidents at Franchisees' Locations

There has been a lot of news lately about risks of franchisors being liable for acts and incidents at franchised locations. The National Labor Relations Board's general counsel recently announced he intends to claim...more

Comparing Franchise Relationships and Beer Distribution Relationships

Beer distribution laws differ from traditional franchise laws in many ways, but they do share some commonalities. As a matter of fact, many states now regulate the relationship between those who brew or import beer into a...more

Second Circuit: Oral Agreement to Pay Commissions Not Barred by Statute of Frauds

A recent opinion from the Second Circuit Court of Appeals reaffirms that the Statute of Frauds will not void an oral agreement to pay commissions if the agreement lacks a fixed duration. In Kroshnyi v. U.S. Pack...more

New Franchising Code of Conduct From 1 January 2015

The biggest overhaul of the Franchising Code of Conduct (Code) since its introduction is reaching completion following registration of the Code on the Federal Register of Legislative Instruments on 3 November 2014. The new...more

The Largest Global Franchise Brands Are U.S. Restaurants

Franchising fared respectably in a recent rating of the most valuable worldwide brands across all industries. McDonald’s was rated among the ten most valuable worldwide brands in Interbrand’s 15th annual Best Global Brands...more

FRANCHISEE 101: Illusory Arbitration Provisions Not Enforceable in Indiana

In 2010, Steak 'n Shake, a franchisor of hamburger restaurants, adopted new pricing and promotion policies that required all franchisees to follow company mandated pricing on every menu item and to participate in all...more

FRANCHISOR 101: Venue and Choice of Law Provisions Not Enforceable in California

In 2013, Pepe's Franchising, a U.K. company, entered into a Master Franchise Agreement with Frango Grill, based in California, granting the right to operate and franchise Pepe's restaurants in California. The Agreement's...more

Joint employer law: is the NLRB edging closer to the abyss? Takeaways from the Bloomberg webinar

Last week, Bloomberg BNA presented a webinar titled “The Current State of Joint Employer Law: How Can Both Employers and Unions prepare for the Future?” The three presenters were Barry Kearney, National Labor Relations...more

Top of Mind - October 2014: Editor's Choice

BYOD: cool but dangerous – 3 HIPAA Security Rule challenges, 7 key precautions - Companies and employees like the idea of bring your own device (BYOD) policies that allow employees to use their personal mobiles for...more

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

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

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