Franchisors

News & Analysis as of

Monthly Update—Australian Labour & Employment - February 2017

MESSAGE FROM THE EDITOR - In this edition of the Update, we discuss two significant developments that are likely to have far-reaching impacts for employers and employees across Australia. First, we discuss the proposed...more

Good news for franchisors from the U.S. Department of Labor?

We write to alert our clients and contacts about some positive comments made by the acting Solicitor General pertinent to franchise entities. Specifically, as reported today in Law 360, acting Solicitor General Nicholas Geale...more

Testing a New Franchise Concept

One of the toughest challenges an aspiring franchisor may face is selling its first franchise. Who would take the risk of buying a franchise from a franchise company that has no franchisees?...more

Superior Court of Québec Confirms Validity of Percentage Royalties Paid by Pharmacist-Owners to Franchisor

The Superior Court of Québec (Court), presided by Justice M. Monast, recently ruled on an important point of contention for franchise pharmacies, by confirming the validity of a percentage royalty clause contained in a...more

Franchise and Distribution News - March 2017

Is your dispute, subject to arbitration under your Franchise Agreement, going to be litigated in court? As we all know, using arbitration clauses in commercial agreements is pretty commonplace—particularly in the...more

FRANCHISOR 101: Simplification of SBA Loan Approvals

As independent small business operators, franchisees may qualify for business loans that are guaranteed by the Small Business Administration ("SBA loans"). However, the SBA considers certain types and levels of control...more

BC Franchise Laws Come Into Effect

On February 1, 2017, the British Columbia Franchises Act and Regulations came into effect making British Columbia the sixth province in Canada with franchise legislation. The introduction of franchise legislation in British...more

Now in Effect: British Columbia’s Franchises Act

On February 1, 2017, British Columbia’s Franchises Act (B.C. Act) and Franchises Regulation (Regulation) came into force. Although the B.C. Act follows other provincial franchise legislation closely, including with respect to...more

Attention to Detail is Critical for Franchise Startups

Starting a new franchised business can be an exhilarating experience, combining the thrill of engaging in a new business with the confidence that comes from having the backing of a successful brand. New franchisees, however,...more

The Franchise Disclosure Document – A Brief Primer

The scenario: You operate a prosperous business and believe that the concept can be successful in other markets. But given financial constraints or otherwise, you determine that franchising the business will likely result in...more

Franchise Issues in Commercial Leases

Commercial landlords and tenants are already faced with many issues during the course of negotiating a commercial lease agreement. When the tenant is a franchisee, the franchisor’s requirements (as outlined in the franchise...more

Be Aware of Possible Joint Employer Status with Franchisor

The franchise model is built upon the idea that a franchisee pays for the right to use a franchisor’s brand, marketing and goodwill in launching and operating the franchisee’s business. The franchisee is generally responsible...more

Regulation A+: A Capital-Rising Method that is Ready for Franchising

In a prior article published in Franchising Today, we addressed the intersection of franchises and crowdfunding, a method of business financing which was made legal through rulemaking on the part of the Securities and...more

Drafting Franchise Agreements After Patterson v. Domino’s : Avoiding the Minefield of Vicarious Liability and Joint Employment

Lauded as one of the most important franchise cases in the recent past, Patterson v. Domino’s established a new standard for addressing vicarious liability issues in California. In reaching its decision that Domino’s was not...more

FRANCHISEE 101: Locked In to One Approved Vendor

Franchisors often require franchisees to purchase supplies, materials, or inventory only from suppliers the franchisor approved. But where franchisors see benefits of consolidating by requiring franchisees to participate in...more

FRANCHISOR 101: Are Franchisees Your Employees?

Prudent franchisors have been reducing their apparent control over franchisees' employees to reduce the risk of becoming joint employers of those employees. But could a franchisor's control over the franchisees themselves be...more

Health-chising: Starting-up a Health Care Franchise

In recent years, health care franchises have grown at a rapid pace. Yet, it is worth noting that franchising is not a new concept to the health care industry. Health care franchise systems have been around for decades and...more

Food and Beverage Law Update: December 2016

Overtime Rules Enjoined Nationwide - In State of Nev. v. U.S. Dep't of Labor Case No. 4:16-cv-00731-ALM, 2016 WL 6879615 (E.D. Tex. Nov. 22, 2016), a Texas district court enjoined nationwide the Department of Labor's...more

FRANCHISOR 101: Recent “Franchisor as Joint Employer” Developments

In the last month, McDonald's settled a class action with employees of a franchisee, and a new President of the United States was elected. These two events have something in common with regard to franchising: they are...more

Catch-22 for Franchisors: The Joint Employment Dilemma

As government agencies steadily expand the concept of joint employment, franchisors increasingly find themselves in a difficult position. Since August 2015, when the NLRB ruled in Browning-Ferris that entities with the...more

Your Own Agreements Can Be Your Worst Enemy in IC Misclassification Cases

Companies that use independent contractors (ICs) typically require ICs to sign a contractor agreement prepared by the company. But, if it is drafted like the one reviewed in late September by the U.S. Court of Appeals for the...more

Franchising Update

Franchising has undergone several significant changes in the last quarter. Firstly, the introduction of the Unfair Terms Legislation will no doubt impact the documentation used by franchisors. Secondly, franchisors operating...more

Top Takeaways: 2016 American Bar Association Forum on Franchising

Marc Lieberstein - Marc Lieberstein, Kilpatrick Townsend partner in the firm’s New York office, was honored to participate in the “Mine is Better Than Yours! The Risks and Rewards of Conducting Comparative Advertising”...more

Franchisors Should Consider Signing a Conditional Lease Assignment Rather Than a Franchisee’s Lease

In Franchise & High Properties, LLC v. Happy’s Franchise, LLC, a 2015 decision issued by the Court of Appeals in Michigan, the franchisor, Happy’s Pizza Franchise, LLC, signed a five-year lease for the commercial space to be...more

Joint / Related / Common Employers: Are You at Risk

In recent years, a number of cases have emerged in both Canada and the United States discussing new implications for companies deemed to be joint and related employers. Cases both from the United States and across Canada will...more

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