Franchise Law Update Blog

https://franchiselaw.foxrothschild.com/

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

  • What State’s Law Applies to a Non-Compete Agreement and Why Does it Matter? Employers frequently require employees to sign confidentiality and non-competition agreements.  In most jurisdictions, these agreements are both lawful and prudent provided that they are carefully drafted. In my practice, I draft confidentiality and non-competition agreements and litigate claims of breaches of those agreements.  In almost every agreement I either draft or review, there is a choice of law provision.  If I am drafting or editing the choice of law section, I do not just randomly select any state or a state... More
  • The Next Frontier in ADA Access Litigation: Online Copyright: byzonda / 123RF Stock Photo Are you ready for the next frontier in ADA Access Litigation? We invite you to read Part 1 and Part 2 in a series of posts by Fox partner Dori K. Stibolt, regarding the new trend in ADA Title III litigation involving access to the internet for the visually impaired. Many of these cases have focused on travel, hospitality, restaurant and service companies which necessarily include many companies in the franchise community.  Additionally, claims related to web access for... More
  • Massive Ransomware Attack WannaCry Spreads Worldwide Copyright: mikkolem / 123RF Stock Photo This past Friday, May 12th, ransomware known as WannaCry (also known as WannaCrypt or WCry) spread throughout the world, affecting more than 100,000 systems in 150 countries. Victims of the massive cyberattack included the NHS in the UK, cellular networks in Spain, universities in China and many other large organizations worldwide. For both franchisors and franchisees who are dependent on Windows systems, the attack highlights the significant risks and high costs associated with keeping cybersecurity... More
  • Tesla “Franchisee” Thwarted in Utah Tesla, the electric vehicle automaker, recently lost a round in the Supreme Court of Utah. Tesla set up a wholly-owned subsidiary called “Tesla UT” that was to hold a license to sell Tesla’s cars to the public. The Utah Supreme Court, in a narrow but unanimous decision, held that the arrangement between Tesla and Tesla UT amounted to an illegal automobile franchise under Utah law. The case turned on a relatively straightforward point of Utah law. To wit, in Utah, automobile... More
  • Debit Card Swipe Fees Only Hurdle to Dodd-Frank Repeal? Respecting a issue of great importance to the franchise community, Bloomberg Law this morning is reporting that repealing a cap on debit card transaction fees is the only issue holding up an otherwise unified Republican bill to revamp and largely repeal the Dodd-Frank Act, the Financial CHOICE Act of 2017. Copyright: leaf / 123RF Stock Photo Chairman Jeb Hensarling (R-Texas) told Bloomberg that the cap on debit card transaction fees is the “single most contentious portion” of the repeal bill.  The cap,... More
  • Accidental Franchisor in Hot Water Safe Step Walk In Tub Co. (“Safe Step”) failed to take the requisite “safe steps” before potentially becoming an accidental franchisor. In Safe Step Walk In Tub Co. v. CKH Industries, Inc., Safe Step filed an action against a licensee, CKH Industries, Inc. (“CKH”) for breach of contract for non-payment of certain fees. CKH filed 22 counter-claims against Safe Step including violation of the Federal Trade Commission Rule on Franchising (“FTC Rule”) as well as the state franchise laws of... More
  • Enforcement is on the Menu: May 5, 2017 is the Deadline to Comply with Menu Labeling Rules Copyright: yarruta / 123RF Stock Photo Over two years ago, on December 1, 2014, the U.S. Food and Drug Administration (“FDA”) published a food labeling rule requiring “chain” restaurants and similar retail food establishments to list calorie information on menus and menu boards, including food on display and self-service food (the “Rule”). On May 5, 2017, the FDA will begin enforcing the Rule. Businesses covered by the Rule must be in compliance by May 5, 2017. The Rule implements the nutrition labeling provisions... More
  • Will Florida Cease to be the “Sunshine State” for Franchising? (Part 2/2) Today, we continue our look at proposed changes to Florida’s franchise laws, including proposed changes in transferring franchised businesses, franchisor repurchase obligations and other miscellaneous changes TRANSFERRING FRANCHISED BUSINESS The Act prohibits a franchisor from restricting a franchisee’s ability to transfer its franchised business if the franchisee complies with franchisor’s “reasonable” transfer conditions, and the potential purchaser meets the qualifications for new and renewing franchisees. The Act fails to define what a “reasonable” transfer condition would be. Further, a franchisor must make... More
  • Will Florida Cease to be the “Sunshine State” For Franchising? 1/2 Two state legislators from Florida recently introduced a bill entitled “Protect Florida Small Business Act” (the “Act”), which could actually have the exact opposite effect on franchise relationships in Florida. While many states regulate the franchisor-franchisee relationship through franchise registration and restrictions on termination and non-renewal rights, this proposed legislation would implement some of the most extensive regulations on the franchise relationship in the United States. APPLICABILITY First, the Act is not explicitly clear about what agreements and parties it applies to. The... More
  • Here’s What You Need to Know about British Columbia’s New Franchise Law Contributed by Judy Rost and Ryan Howe* On February 1, 2017, the Franchises Act S.B.C. 2015, c. 35 (the “Act”) came into force in the province of British Columbia, Canada. What this means for franchising in British Columbia: The most important implication for franchisors with operations in British Columbia (“BC”) will be the franchise disclosure requirements stipulated under section 5 of the Act, and as prescribed by the Franchises Regulation, B.C. Reg. 238/2016 (the “Regulation”). Much like the existing legislation in Ontario and... More