Franchisors

News & Analysis as of

Texas Bill Protects Franchisors From Joint Employment Liability

Texas legislators recently passed S.B. 652, which seeks to protect franchisors from employment liability for the actions of franchisees. Enacted in June 2015, S.B. 652 amends the Texas Labor Code to specify that a franchisor...more

New York Singles Out “Fast Food” Industry for Minimum Wage of $15.00

On July 27, 2015, the New York Fast Food Wage Board (“FFWB”) formally approved resolutions to increase the minimum wage for workers in quick-service and fast-casual restaurants in New York City and the rest of New York to...more

New Texas Law: Is it Enough to Ease Concern Over Franchise Liability for Employment-Related Claims?

In response to concerns of franchisors that recent National Labor Relations Board (NLRB) actions threaten to undermine the common understanding of a franchisor-franchisee relationship, the Texas Labor Code was amended by the...more

Franchise and Distribution News - July 2015

A VIEW FROM TWIN PEAKS - Quick. Define Twin Peaks. Other than the obviously now dated TV show, up until a couple of weeks ago, the only other definition of Twin Peaks was a restaurant chain that featured double entendre...more

Looking Forward by Looking Back: China’s Franchise Regulations After Eight Years

On July 1 and 2, we, representing the International Franchise Association, met with China’s franchise regulators in Beijing and Shanghai. The conversation would be familiar to anyone who has been closely following the...more

Crossing the Line: Don't Let Business Clients Become Accidental Franchisors

Too often, expansion-minded business owners choose to offer trademarked products or services through purported licensing agreements or distribution or dealership arrangements only to discover, well into the game, that what...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

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

FRANCHISOR 101: Freshii Not Joint Employer

The National Labor Relations Board ("NLRB") recently published a memo finding that Canadian fast-casual restaurant franchisor Freshii is not a joint employer of its franchisee's employees. The ruling concerns unfair labor...more

A ray of light? NLRB opines franchisor is NOT a joint employer

In an opinion that caught close observers by surprise – particularly given the contemporaneous statements from the National Labor Relations Board’s General Counsel at a Senate hearing on May 14 – the NLRB’s Division of Advice...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

The ACCC's hunt for franchisors starts with AU$500,000 penalty

In a wakeup call for franchisors, the Federal Court earlier this week imposed an AU$500,000 penalty on South East Melbourne Cleaning Pty Ltd (formerly Coverall Cleaning Concepts South Easy Melbourne Pty Ltd) (Coverall) for...more

Top franchise matters of 2014

DLA Piper IPT partners Barry Heller, John Verhey and John Hughes recently conducted a webinar reviewing 2014’s top franchise decisions. Three significant 2014 matters are summarized below. 1. In Patterson v. Domino’s...more

FRANCHISOR 101: Forum Selection Clause Held Enforceable

A federal court in Sacramento recently upheld a franchisor's forum selection clause and transferred an action brought by an area representative to the federal district court in the Western District of Texas....more

The Construction Advantage – Issue 15

2015 NLRB Developments - The National Labor Relations Board is now fully and legally appointed, after the U.S. Supreme Court invalidated recess appointments made in 2013. The new NLRB continues to expand its agenda,...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

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

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

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

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

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