Blogs

Emerging Companies Insider

The Emerging Companies Insider blog focuses on recent and developing areas of the law affecting startup and emerging growth companies and their investors, including choice of entity, shareholders’ agreements, issuance of equity to employees, preparing for and executing a capital raise, exit strategies and the JOBS Act and its impact on how companies can and should raise capital from investors.

Franchise Law Update

For those with an interest in the world of franchising, the Franchise Law Update blog will become a regular stop for you. Our bloggers discuss not only the regulatory aspects of franchising, but also diverse topics such as business finance, employment, litigation and the protection of intellectual property including trademarks and copyrights. We understand that while franchising has its unique aspects, franchise businesses confront the same opportunities, changes and challenges as any other business.

Recent Blog Posts

  • The Franchisor is Liable for Franchisee’s Submission of Fraudulent Tax Statements?! In Lomeli v. Jackson Hewitt, Inc., the United States District Court in the Central District of California held that the plaintiff, Luis Lomeli (“Lomeli”), had submitted enough evidence to hold the franchisor (“Jackson Hewitt”) vicariously liable for potential class actions due to a franchisee’s preparation and submission of fraudulent tax returns. The most concerning part of this decision is that the Court held that Jackson Hewitt could be directly liable for the fraud claims. This decision is another lesson in... More
  • Broad Provisions in Franchise Agreement: How Far is too Far? The fight against joint employment of franchisors and franchisees took a small hit when the Western District of Pennsylvania (“Court”) chose to allow a franchisee’s employee’s suit to proceed. In Harris v. Midas, et. al., the plaintiff, Hannah Harris (“Harris”), convinced the Court that she had proffered enough evidence to allege a plausible basis to hold the franchisor (“Midas”) as a joint employer and vicariously liable for the franchisee’s conduct with respect to Harris’ sexual harassment claims against her franchisee... More
  • Trademark Licensees Beware: License at Risk in Franchisor Bankruptcy Below is a Guest blog post authored by our own Michael Viscount: A concern for franchisees is the impact on license agreements for intellectual property when the licensor files bankruptcy and seeks to shed itself of burdensome obligations under license agreements. The impact on the licensee is different depending on the type of IP licensed. And, to further complicate matters, with regard to impact on trademarks the results can be different depending upon where the licensor files for bankruptcy. Rejection of Executory... More
  • Four Considerations for Advisor Option Grants Startup clients often rely on independent contractors and advisors during their early stages but do not have the cash to pay them, so they turn to equity compensation. Stock options are a great incentive tool, but founders should consider the following before issuing options to advisors or independent contractors: How Much?: Most founders grant early advisors and contractors options that cover anywhere from 0.10% to 1% of the company’s fully diluted stock on a case-by-case basis. Founders should consider (i) how... More
  • Los Angeles Startups: Join Us April 24 for an HR Boot Camp! Attention all Los Angeles area emerging companies! Want to get the most out of your people and your investment? Focus on your company’s HR and corporate governance. Join Fox Rothschild Employment and Corporate attorneys Sahara Pynes and Emily Yukich as they host a free workshop for startups and emerging companies. Enjoy breakfast on us as you learn how to keep growing businesses on track, create invested teams, manage risk and cultivate top-notch culture. When:  April 24, 2018, 8:30am – 10:00am Where:  Fox’s Los Angeles Office  10250 Constellation Blvd.  Suite... More
  • State Regulatory Roundup (ABA Franchise Forum Retrospective) 23006593 – cartoon cowboy rider on the horse throwing lasso Each year the ABA Forum on Franchising Annual Meeting offers a regulatory roundup on state disclosure and registration issues consisting of a panel of franchise examiners from some of the most difficult registration states. This past year in Palm Desert regulators from California, Maryland and Washington offered their tips, tactics and recommendations for preparing and registering franchise disclosure documents compliant with federal and state law.   Some of the most interesting takeaways... More
  • How to Ensure Your Franchise Application Process is Airtight–No Matter Your System’s Size Last year at the ABA Forum on Franchising Annual Meeting, the programming included a seminar entitled “Between You and Me: A Toolkit to Counsel in and to Smaller Systems.” The purpose of the session was to provide new in-house lawyers an overview of some of the day-to-day legal conundrums that growing brands face and instructions on how to face such issues. 70454390 – high angle view of magnifying glass over background check form One of the most interesting and important issues addressed... More
  • Succession Plans that Succeed Succession plans ask what will happen when the principal owner/operator is not available. Copyright: deklofenak / 123RF Stock Photo A succession plan may be coordinated with an estate plan, which contemplates dispositive transfers through sale, and other means. The disposition can also occur by wills and trusts, buy-sell agreements, augmented by life insurance and family partnerships. A valuation of the business is often a key element in any exit strategy, and the succession plan, estate plan and valuation should be coordinated. These... More
  • A Closer Look: Recent NVCA Form Updates Highlight Discrimination and Harassment Key Issues Recently, we discussed generally the NVCA’s updated model legal documents on this blog. Of particular interest in the new forms is the NVCA’s attention to anti-discrimination and anti-harassment policies for emerging companies. Discrimination and harassment issues have impacted many industry-leading companies in the last year – and investors, board members and company executives all have aligned interests to ensure that the companies they are building are actively working to prevent discrimination and harassment. Two of the documents published by the NVCA... More
  • How Will GDPR Affect Cross-Border Transfers of Personal Data? Copyright: maxkabakov / 123RF Stock Photo On Fox’s Privacy Compliance & Data Security blog, associate Michelle Rosenberg provided a breakdown of the EU’s General Data Protection Regulation (GDPR), a widely discussed and substantive change to European data privacy rules going into effect on May 25, 2018. Michelle notes the global impact on companies large and small that possess, transfer and process personal data of EU individuals. She also provides an overview of the methods of compliance available to such companies, namely... More
  • Join Us April 12 for the ABA CLE Program “Finder’s Fees: Statutory Challenges for Startups” For early-stage companies in need of capital, finding potential investors can be difficult and time-consuming, especially when conditions in the capital markets are tight. For many companies, using a “finder,” an individual or entity that identifies, introduces and negotiates with potential investors, to help locate potential investors may seem to be a promising solution to this problem. However, there are risks involved in using finders, including those arising from potential violations of the SEC’s broker-dealer registration requirements. These risks are... More
  • NVCA Debuts Updated Model Legal Documents The National Venture Capital Association (NVCA) publishes model legal documents for venture capital financings, including a Certificate of Incorporation, Preferred Stock Purchase Agreement and Investors Rights Agreement. These documents enjoy wide industry acceptance as baseline agreements that parties and their counsel can tailor for each deal. They also include commentary on East and West Coast practice and bracketed alternative provisions to insert/omit depending on the deal terms. Perhaps most attractive to the parties, starting from a standardized form can decrease... More
  • National Restaurant Association Releases New Cybersecurity Guide The National Restaurant Association recently released a new guide for restaurant operators looking for more information on how to increase their cybersecurity efforts. In 2015, the National Restaurant Association released its first manual for restaurant owners called “Cybersecurity 101: A Toolkit for Restaurant Operators” [PDF] which outlined best practices on five core areas of cybersecurity planning. This past month, the National Restaurant Association built on this manual with the release of “Cybersecurity 201: The Next Step,” [PDF]  which provides restaurant-specific type... More
  • What Types of Franchise Sellers Must Register in Washington? Michelle Webster, a franchise financial legal examiner with the State of Washington Department of Financial Institutions, took a few minutes at the start of the ABA Forum on Franchising’s Annual Meeting seminar on disclosures to discuss the registration of franchise brokers in Washington. The main takeaway? If you sell franchises in Washington, then there is a good chance you need to register. 27168210 – vintage stamp with text the evergreen state written inside and map of washington, vector illustration Third parties selling... More
  • Sign Me Up! How To Waive the Notary Requirement for International Franchisors  International franchisors inbound into the U.S. face a complex set of business decisions and legal regulations.  Even seemingly simple tasks–like properly executing a franchise registration application–can become a time-consuming and expensive endeavor (especially where the franchisor does not have an authorized signatory in the U.S.).  Knowing how and when to request waivers can save time and money. Franchise registration applications must be signed by the franchisor’s authorized representative. In addition, some of the signatures must be notarized.  Generally speaking, satisfying this requirement... More