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

  • Federal Court Concludes Franchisor Was NOT Joint Employer Another case has been decided adding to the back and forth in the legal world on the issues of a joint employer relationship of a franchisor and its franchisee and vicarious liability and agency between a franchisor and franchisee. In Harris v. Midas, (2017 WL 3440693 (W.D. Pa. Aug. 10 2017)) a federal court in Pennsylvania dismissed an auto repair service franchisor from a sexual harassment case brought by a former employee of one of its franchisees.  The plaintiff alleged multiple... 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
  • Why Your Company Name Matters –The Right Name Accelerates Growth and Saves You Marketing Costs When Every Dollar Matters An abbreviated version of this article will appear in the American Bar Association’s Business Law Today, Fall 2017 Edition. Is your startup brand so strong that consumers tattoo the logo on their arm? Or so hard to pronounce that investors, vendors and customers are disinclined to do business with you? According to a study published in the peer-reviewed academic journal Venture Capital, your company name matters even more than you think.  The study, entitled “The Effect of Company Name Fluency on Venture... More
  • Minnesota’s New LLC Act Takes Full Effect on January 1 In an Alert published on Thursday, Andrea Ravich provides an update on changes to Minnesota corporate law regarding limited liability companies (LLCs) that will take effect in January 2018, and notes action items for companies to ensure compliance. Copyright: tashatuvango / 123RF Stock Photo An overhaul of Minnesota corporate law on limited liability companies, or LLCs, that was phased in over three years will take full effect in January 2018. The new act differs significantly from the old act, but is modeled after the Revised Uniform... More
  • At the buzzer: FDA (again) extends compliance deadline for menu labeling rules Copyright: bluedarkat / 123RF Stock Photo Just four days shy of the enforcement deadline, the FDA extended the date for restaurants and similar retail food establishments to comply with its menu labeling rule. The rule was originally published on December 1, 2014 and requires certain food establishments to list calorie information on menus and menu boards, including food on display and self-service food (the “Rule”). Enforcement was delayed multiple times, and the Rule was slated to go into effect on May... More
  • Drafting Matters: When non-competes and renewal provisions collide If a franchisor waives the non-compete provision in its current franchise agreement, can it enforce a non-compete when the franchise agreement is renewed? According to a recent decision by the 9th Circuit Court of Appeals, the answer is yes, and franchisors should consider a few key lessons from the decision. Robinson, DVM v. Charter Practices International, LLC, No. 15-35356 (June 21, 2017). In Robinson, a franchisee sued its franchisor for breach of contract and other claims when the franchisor refused to... More
  • Cities of Wisconsin, BEWARE! A recent decision by the Wisconsin Supreme Court (“Court”) has potentially far-reaching consequences for municipalities and how they conduct certain business. In Benson v. City of Madison, the Court analyzed whether the Wisconsin Fair Dealership Law (“WFDL”) applied to the arrangement between the City of Madison (“City”) and multiple entities, collectively (“Golf Pros”). The City entered into contracts with Golf Pros to operate, manage and provide certain services at the golf courses owned by the City. The City paid Golf Pros a... More
  • Private Equity Firms Eye Medical and Dental Practices for Acquisition Debra L. Gruenstein writes: Private equity firms have recently been deploying capital to purchase medical and dental practices. The typical transaction would involve the purchase of multiple practices and the establishment of a management company. The physicians would be paid a multiple of earnings and receive some rollover equity in the management company. Although many states have had a prohibition on the corporate practice of medicine for years, recent cases in multiple jurisdictions have made the structuring of these transactions more complex... More
  • Committee on Foreign Investment in the U.S. (CFIUS) May Expand Scrutiny of Cross-Border Transactions Barbara P. Alonso writes: The Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee led by the U.S. Treasury Department that reviews foreign direct investment transactions, is likely to be applied in a more stringent manner by the Trump Administration. Members of Congress and of the Trump administration have advocated for enhanced CFIUS reviews of transactions that involve the change of control of U.S. companies (or foreign companies with U.S. assets) to foreign interests. Since its creation in 1988,... More
  • Curing Corporate Missteps Under Delaware Corporate Law The Problem As every founder knows, starting and scaling a company is an extremely difficult and multi-faceted undertaking. In addition to the primary goals of developing a viable product, finding (and in some cases building from scratch) a robust market, and raising the capital necessary to sustain and scale their business and operations, founders and their core teams also grapple with the day-to-day management and operations of a growing enterprise, whether that be personnel issues, forecasting cash needs and burn rates... More
  • Tax Implications of Your Stock Options Ethan Zook and Jacob Oksman write: Attracting and retaining high-performing employees is critical to the success of any emerging company. A key ingredient to securing the right talent base is an attractive and aligned remuneration plan. Most emerging companies will structure their remuneration plan leveraging three key elements: a competitive base salary, a short-term bonus plan, and a long-term incentive plan (LTI) that typically comes in the form of a stock option plan. The base salary and bonus plan are typically structured... More
  • Court: Philadelphia Beverage Tax Is Constitutional Updating our blog postss of March 29, July 7 and December 26 of 2016, an appeal to the Commonwealth Court of Pennsylvania seeking to invalidate the Philadelphia Beverage Tax on Sugar Sweetened Beverages (the “PBT”) failed.  In a majority opinion filed on June 14, 2017, Judge Michael Wojcik, joined by 5 of the 7 judges hearing the appeal, affirmed the judgement of the Philadelphia County Court of Common Pleas that the tax is constitutional and consequently agreed that an injunction against... More
  • Is Everything “Settled” in Your Settlement Agreement? Not Quite! A recent case involving the Whataburger franchise system reminds franchisors of the importance of the use of iron-clad language when granting future development rights. In Whataburger, Inc. et. al. (“Whataburger”) v. Whataburger of Alice, Ltd. (“WOA”), the court was tasked with interpreting the language of a settlement agreement (“Settlement Agreement”) to determine whether WOA had the unfettered right to open new restaurants. Copyright: jagcz / 123RF Stock Photo As background, WOA had previously operated 28 franchised restaurants and sold them to Whataburger... More
  • Canada’s Horrible Anti-Spam Law Almost Got Even More Horrible As many Canadians, as well as foreign companies doing business in Canada, now know, the cornerstone of Canada’s Anti-Spam Law (CASL) is a general prohibition against sending any “commercial electronic message” without the prior express or implied consent of the recipient. A “commercial electronic message ” or “CEM” is broadly understood as any electronic message that encourages participation in a commercial activity. That’s a big deal, because one of the fundamental elements of CASL that makes it so onerous is... More