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

  • Oops. How to Fix a Franchise Registration Defect in California! 10560779 – closeup portrait of a businesswoman in shock, isolated on white background Maybe you are an international company with a successful brand that sold a master franchise or area representative right in California without knowing the robust state franchise registration laws. Maybe you are an up-and-coming pizza joint operating in Los Angeles that decide to sell a business associate the right to operate a location under you brand with your recipes in exchange for a fee without considering if it was a “franchise.” You did not... More
  • No-Hire and No-Solicit Covenants Could be Overcooked Many franchise agreements contain a provision that restricts a franchisee from hiring or soliciting the employees of the franchisor or other franchisees. A class action lawsuit that was recently filed in the Eastern District of Texas could require removal of this type of provision in the future. Though this suit is only at the initial complaint phase, the outcome of this case could help shape the future of franchisee restrictive covenants. In Ion v. Pizza Hut, LLC, Kristen Ion (“Ion”) filed... More
  • Worried about GDPR? We have an App for That Fox Rothschild LLP has deployed a new mobile app to assist companies, including franchisors, as they rush to comply with the European Union’s General Data Protection Regulation (GDPR) – a complex set of new data privacy rules with major implications for businesses.  The app – GDPR Check – helps businesses catalog their data management practices and policies to determine necessary steps to comply with GDPR when it takes effect in May. “The pending implementation of GDPR will impact all companies that process... More
  • ABA Forum Takeaway: Will the Trump Era Mark the End of Franchise Regulation? As we head into Tuesday night’s State of the Union Address, our thoughts at Fox Rothschild return to last year at the ABA Forum on Franchising Annual Meeting in Palm Desert, California.  One of the most interesting seminars was entitled “What’s New and What’s Next: The New Administration and Beyond.” In addition to reviewing updates on joint employer issues, SBA lending rules and changes to accounting rules, the session provided an interesting update on whether the FTC Franchise Rule will succumb... More
  • Coming Attractions: NY Proposes Regulations on Employee On-Call and Call-In Pay The New York State Department of Labor published proposed regulations to the Miscellaneous Industries and Occupations Wage Order in the New York State Register addressing so-called “just in time,” “call-in” or “on-call” scheduling demands facing employees. The proposed regulations, published on November 22, are subject to a 45-day comment period. According to Governor Andrew M. Cuomo and the NYSDOL, employers sometimes schedule or cancel a worker’s shift a few hours before the shift begins, or just after it starts, which “often leave[s] workers... More
  • What Restaurant Franchising Tells Us About the Future 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 commitments or investments. Experts in these fields met together in November 2017 to test their assumptions. Kevin Burke, Managing Director of Trinity Capital LLC, delivered a report which he summarized the economy for restaurants “As Good as it Gets.” The formal title was a very analytical “A Reversion... More
  • Browning-Ferris Joint Employer Standard Reversed by NLRB Yesterday afternoon, the NLRB issued a decision in Hy-Brand Industrial Contractors that caused a collective sigh among employers.  The decision rolls back the joint employer standard to what it was before Browning-Ferris Industries, 362 NLRB No 186. The Browning-Ferris decision was greeted with alarm by most employers, especially franchisers and franchisees, as it made it easier for employees to claim that two entities were joint employers. Specifically, Browning-Ferris held that two entities could be joint employers even where they never exercised joint control over essential... More
  • If You Operate a Website, Don’t Miss the 12/31 Deadline to Update Your DMCA Notice On Fox’s Franchise Law Update blog, partner John Gotaskie recently discussed an important upcoming deadline for businesses, including emerging companies, and entrepreneurs that operate websites that accept user-generated content: If your franchise–or your franchisees–operate a website that accepts user-generated content, NOW is the time to contact the Copyright Office. Whether you realize it or not, your website probably accepts user-generated content. Examples of such content include e-commerce websites that accept product reviews, franchise-sponsored blogs that publish user comments on posted articles, and brand fandom sites... More
  • If You Operate a Website, Don’t Miss the 12/31 Deadline To Update Your DMCA Notice If your franchise–or your franchisees–operate a website that accepts user-generated content, NOW is the time to contact the Copyright Office. Whether you realize it or not, your website probably accepts accept user-generated content. Examples of such content include e-commerce websites that accept product reviews, franchise-sponsored blogs that publish user comments on posted articles, and brand fandom sites that permit users to share photos or videos. It can be very difficult for you to determine whether user-generated content posted to your brand’s website was created by... More
  • Did You Hear? Watch Out For Ohio’s BOPPA! A recent decision in the United States District Court of Arizona (“Court”) could have far-reaching consequences to many franchisors based on the broad-sweeping principles the Court used in its reasoning. In Zounds Hearing Franchising, LLC et. al. v. Bower et. al., the Court answered the question of whether the Ohio Business Opportunity Purchasers Protection Act (BOPPA) trumps a choice of law and venue provision that provides for the application of law other than the State of Ohio. Here, four franchisees filed... More
  • Drafting Matters: Do your non-competes bind the correct parties? A federal court in Colorado recently upheld a franchisor’s non-competition provision despite that state’s strong public policy against non-competes. The franchisor prevailed due to its thoughtful contract drafting and ability to effectively communicate the unique nature of franchising to the court. In-home care franchisor Homewatch International, Inc. and its franchisee, Prominent Home Care, Inc., signed a franchise agreement that terminated on June 30, 2016. The next day, Prominent’s sole shareholder and officer (the “Defendant”), started a competing company. Homewatch sued the... More
  • Despite Legal Uncertainties, Initial Coin Offerings (ICOs) Attract Startup Attention Over $1.5 billion has been raised by token offerings – also known as initial coin offerings or ICOs – so far in 2017. Not surprisingly, many startups are eager to capitalize on this possible funding source. Although ICOs can be a useful method of raising capital, a number of legal issues must be considered in structuring and completing an ICO. One such issue is whether the tokens being offered in an ICO will be considered securities. A report issued by the... More
  • M&A Market Outlook Strong for Emerging and Growth Stage Companies In a recent study polling more than 400 business owners, founders and leaders across the U.S., Harris Williams reports that despite mixed positions on the nation’s general political climate, interest in M&A among middle market private companies continues to rise. Copyright: bas121 / 123RF Stock Photo Key findings included: 95% of survey respondents are interested in M&A over the next three years – up from 81% in 2015 65% said they were interested in acquiring other companies 52% said they would consider selling 36% would consider... More
  • ABA Panel Tackles Venture Investing in Cannabis Companies Venture capital is playing a growing role in the country’s emerging legal cannabis industry. Attorneys Emily J. Yukich and Matthew R. Kittay of Fox Rothschild’s Emerging Companies & Venture Capital Practice will conduct a panel discussion with industry insiders during the American Bar Association Business Law Section’s annual meeting in Chicago. The Angel Venture Capital Subcommittee, which Yukich and Kittay co-chair, will present an in-depth 360-degree examination of venture capital investing in cannabis companies, featuring: Panelists: Jeremy Unruh, general counsel and director of... More
  • The Difference Between Venture Capital and Private Equity (And How Star Wars and Star Trek Will Help You Remember Them). Quick quiz: If your startup is seeking investors, will you have more success with private equity or venture capital firms? How about when you’re looking to sell that company? The answers are (1) venture capital and (2) private equity.  If you weren’t sure, you’re not alone; the terms are often confused or used interchangeably.  However, PE and VC firms generally have very different investment strategies.  Understanding the distinctions may help save time and money and…perhaps…save face (i.e., not everyone will judge you for... More