Franchisors

News & Analysis as of

NY Attorney General Schneiderman Declares “War” on Non-Compete Agreements That He Perceives as Overbroad

In an initiative that is virtually without precedent in New York, in the past two months (June 15, June 22 and August 4) Attorney General Schneiderman announced agreements with three separate companies in three different...more

Subway, DOL Partner to Improve FLSA Compliance

Last week, the Subway restaurant chain entered into a landmark partnership with the U.S. Department of Labor (DOL) aimed at improving Fair Labor Standards Act (FLSA) compliance among the chain's 27,000 franchisees. The DOL...more

Should Franchisors Become BFFs with WHD?

Expanding upon a relationship started in 2012, the U.S. Department of Labor’s Wage & Hour Division and Subway announced a voluntary compliance agreement earlier this week. Billed as an effort at increasing Subway’s social...more

Update For The Franchise Industry: Is Your Brand Manager Creating A “Joint Employment” Relationship With Your Franchisees’...

For several years now, franchisors have been the subject of attention in the labor and employment law arenas, and new rules and regulations are challenging franchise relationships in a number of ways. One increasingly...more

Federal court certifies class of franchisee’s employees to pursue ostensible agency claims against franchisor: three takeaways

In Ochoa, et al. v. McDonald’s Corp. et al.,[1] the United States District Court for the Northern District of California recently certified a class of more than 800 current and former employees of a McDonald’s franchisee in...more

FRANCHISOR 101: Outdated FDDs and Unregistered Franchises

The California Department of Business Oversight ("DBO") recently issued three Orders against franchisors for violating California's franchise laws....more

FLSA Compliance For Franchises…and the Joint Employer Tightrope

In May, the long awaited Department of Labor’s revisions to the FLSA’s white collar exemption rules were published and have many employers, including franchisors, concerned with compliance. John Skelton, a partner in our...more

Are you Ready for the Extension of the Unfair Contract Terms Regime to Franchise Agreements?

Since 2010, the Australian Consumer Law (ACL) and the ASIC Act have prohibited and made void terms in standard form contracts with consumers that were unfair. From 12 November 2016, the Unfair Contract Terms regime (UCT...more

Franchisor to Be Considered Statutory Employer? PA Supreme Court to Decide

The far-reaching implications of this decision could change the existing franchise business model. Is a franchisor a statutory employer of its franchisee’s employees? The Workers’ Compensation Appeals Board thinks so,...more

Franchising Update

Franchising is set to undergo change following the Australian Federal election. The Senate Standing Committee on Education and Employment recently recommended further amendments to the Franchising Code of Conduct to allow...more

FRANCHISOR 101: Reducing the Risks of Joint Employer Liability

With the risk of franchisors being jointly liable for obligations to franchisee employees, and franchisees exposed to unionization of employees if their franchisor is a joint employer, we present this list of 68 steps every...more

Employment Law - June 2016

OSHA's Electronic Submission Rule Finalized - Why it matters - Three years in the making, the Occupational Health and Safety Administration (OSHA) finalized a new rule mandating the electronic submission of injury...more

Chorley Enterprises, Inc. v. Dickey’s Barbecue Restaurants, Inc.: Arbitration Provisions in Maryland Franchise Agreements

Maryland law requires franchisors include a provision in their franchise agreements that preserves the franchisee’s ability to litigate certain claims in court rather than in arbitration. In Chorley Enterprises, Inc. v....more

FRANCHISOR 101: State Bills re Franchisor Joint Employer Liability

With franchisors deeply concerned about joint liability for franchisee employees, more states are passing laws trying to prevent that from happening. Here are some states and measures that have passed: Texas enacted...more

Defend Trade Secrets Act Presents Opportunity And Challenges To Franchisors

The Defend Trade Secrets Act of 2016 ("DTSA") was signed into law on May 11, 2016 following very strong bipartisan Congressional support. The DTSA creates a new federal civil private right of action for misappropriation of...more

FRANCHISEE 101: What to Do About Franchisor’s Harmful New Policies

Franchisees aren't always excited when their franchisor introduces a new policy. But if a new policy overreaches and might doom a franchisee's business, can it be stopped before it starts?...more

The McDonald’s NLRB Case: At The Intersection Of Hot Legal And Political Issues

Despite popular belief, the fate of fast food franchises around the country does not rest in the hands of Lauren Esposito, an unelected administrative judge for the National Labor Relations Board (NLRB). Whatever decision...more

Loyalty Programs: All Fun and Games Until Someone Wants You to Buy Them a Harrier Jump Jet

In-house counsel should consider the myriad legal issues that can affect a consumer loyalty program, including numerous consumer, franchisee and regulatory issues....more

The impact on franchising of the new European Directive for the protection of trade secrets

On 14 April 2016, after a lengthy gestation period, the European Parliament finally approved a new European Union Trade Secrets Directive. This will be the basis for new harmonised laws to protect secret and valuable...more

FRANCHISOR 101: Wins, Losses & Lessons in Joint Employer Liability

As joint employer liability continues to develop, plaintiffs seeking deep pockets continue to claim, with some success, that franchisors are joint employers, responsible for actions of their franchisees' employees. In April,...more

Franchisee Can’t Work Its Way Out of Trademark Infringement and Breach of Contract Litigation on Jurisdictional Grounds

An out-of-state franchisee sought to escape the reach of the Massachusetts District Court in a breach of contract and trademark infringement litigation filed by its Massachusetts-based franchisor. But, the parties quickly...more

Improving Franchise Laws

Will California’s recent overhaul of its franchise relationship law lead to a proliferation of state franchise relationship laws? I doubt it. As I’ve written elsewhere, my guess is that the California law represents a...more

FRANCHISEE 101: Purposes and Limits of Non-Compete Clauses

Many franchise agreements have "non-compete clauses", which state that after termination or expiration of the franchise agreement, the ex-franchisee may not operate a business that is similar to or that would compete with the...more

FRANCHISOR 101: Protecting Interests in Preliminary Injunctions

A franchisor in a termination dispute with a franchisee may request a preliminary injunction to force the franchisee to immediately stop operating the franchised business and using the franchisor's trademarks and intellectual...more

Michigan Franchisors Not Joint Employers of Employees of Franchisees Absent Agreement

On March 22, 2016, Michigan joined Wisconsin, Texas, Louisiana, and Tennessee by amending its Franchise Investment Law to make it clear that unless otherwise specifically provided for in the franchise agreement, a franchisee...more

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