Mediation is very effective in resolving disputes. Franchisors are enthusiastic about mediation, especially pre-suit, because it can eliminate the need to disclose settlements to prospective franchisees otherwise required...more
Franchisor obtains $2,064,735.75 arbitration award against failed area developer.
In an arbitration decision handed down by the American Arbitration Association, Rita’s Franchise Company, LLC obtained an award against a...more
The CARES Act has amended the Bankruptcy Code to provide an expedited and easier version of a business bankruptcy proceeding. We now have “Subchapter 5” for small business and individual debtors. This process fulfills a sweet...more
A recession is coming, if it is not already here. But this won’t be a recession like 2008. Back then, the banks threw you under the bus so that they could survive. Today, they are stronger. More importantly, they know they...more
Franchise systems, and many licensing arrangements contain anti-poaching provisions. These provisions are being tested under the antitrust laws as being anticompetitive. This article will discuss the benefits and burdens of...more
The 2019 “Best and Worst Franchise” rankings have been published by Forbes. The franchise analytics firm, FRANdata, was commissioned to apply a methodology that ranks franchise brands on “health and appeal,” from the...more
In the near future, customers will likely be ordering their fast food through their smart home devices, such as Amazon’s Alexa or Google Home. Gary Vaynerchuk, chairman of VaynerX, a modern-day media and communications...more
The Federal Trade Commission (“FTC”) has requested public comments on its Trade Regulation Rule entitled “Disclosure Requirements and Prohibitions Concerning Franchising” (the “Rule”). The Rule makes it an unfair or deceptive...more
Last time we asked, given the high number of restaurant concept bankruptcies and money sloshing around in the sector, is there still more upside than downside in the restaurant franchising sector? We can find the answer by...more
Imagine operating a single restaurant. The food keeps bringing them in, and prices are relatively stable. Consumer confidence is high, unemployment low, discretionary income rising, and people are going out more. Now multiply...more
To paraphrase Benjamin Franklin, “Those who fail to plan, plan to fail.” That is true in any business, but particularly so in franchising. Planning is more important in franchising because franchising leverages a...more
In our last post, we examined some of the types of risk that come with growth. In this post, we discuss some forms of diligence that may be used to better manage that risk....more
Growth can be expensive, but it is always more expensive when the expansion is taken without risk assessment. Whether domestic or foreign, many risks can be reduced or avoided by proper consideration of differences between...more
Renewed Efforts to End No Poaching Provisions-
Franchisors need to review their franchise agreements and take immediate action in response to the recent onslaught of legal action over “naked no poaching” provisions in...more
Franchisors need to review their franchise agreements and take immediate action in response to the recent onslaught of legal action over “no poaching” provisions in franchise agreements.
In a typical franchise agreement, a...more
Change is inevitable in a franchise system, and disclosure then becomes a concern. Disclosure may be a business issue for the existing franchisees, but it becomes a legal issue in the offer and sale of franchises. The...more
Restaurant operators and their financiers often need to predict the future. The operators, mostly from franchised brands, need to adapt to changing tastes and fashion. The financiers need to assess risk before making...more