Franchising & Distribution

Franchising & Distribution

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

  • NASAA’s Proposed FDD Cover Page Changes: Helpful or Misleading? The North American Securities Administrators Association, Inc. (“NASAA”) is proposing to revise the instructions in the NASAA Franchise Registration and Disclosure Guidelines (the “Guidelines”) that outline policies and procedures regarding the preparation of a franchise disclosure document (“FDD”). Specifically, NASAA has set forth a proposal for public comment that replaces the “State Cover Page”  to the FDD with three separate pages titled “How to Use this Franchise Disclosure Document”, “What You Need to Know About Franchising, Generally”, and “Special Risks... More
  • The Taxman Cometh (for Your Internet Sales) In a closely watched 5 to 4 decision authored by retiring Justice Kennedy in South Dakota v. Wayfair, 585 U.S. ___ (2018), the U.S. Supreme Court reversed decades of Supreme Court precedent, giving state and local governments the right to collect sales taxes from out of state retailers on online sales made into the local jurisdiction. The case involves Wayfair, a furniture and home company which sold products over the Internet into the state of South Dakota.  The law in question... More
  • (Almost) All Your Tricky FDD Drafting Questions Answered Almost every year at the IFA Annual Legal Symposium in Washington D.C., a panel of distinguished franchise attorneys and state regulators will discuss best practices in drafting a franchise disclosure document in compliance with the FTC Franchise Rule.   This year was no different and the workshop “Thorny FDD Disclosure Issues” offered a number of best practices and tips to help draft an FDD that is compliant with federal rule and state law and will breeze through the state registration process: 25388704... More
  • Will a GrubHub Restaurant Take Over a Neighborhood Near You? Each year in Washington D.C., the IFA joins forces with the International Bar Association’s Franchising Committee (IBA) to hold the IBA/IFA Joint Conference immediately after the IFA Legal Symposium. This was my first year attending. As our international franchise practice grows, I found it a rewarding opportunity to educate myself about the latest issues facing international franchise practitioners. The most fascinating andlively discussion was held during an interactive workshop entitled “Disruptive New Technologies and Franchising.” 48329671 – dish fast delivery flat... More
  • Are You Going to the International Franchise Expo This Week? The International Franchise Expo (IFE) starts TODAY (May 31st) and runs through Saturday, June 2nd at the Javits Center in New York City.  The IFE is one the largest franchise expo in the country.  This is an opportunity for franchise systems to market their brands face to face with prospective franchisees and for prospective franchisees to research brands and investigate potential franchise opportunities.  However, the IFE is not simply an franchise sales expo.  The IFE offers many additional opportunities as well.  For example, many... More
  • Unique Data Breach Issues Facing Franchise Systems I recently attended a very informative panel discussion at this year’s IFA Legal Symposium in Washington D.C. earlier this month on addressing data security risks in franchise systems. The panel, consisting of two attorneys with Bank of America Merchant Services provided some good tips and takeaways for franchise systems: Do tabletops.   Your franchise system should have a data response plan in place for various potential breach scenarios and practice the plan regularly by conducting tabletop exercises. The last thing you want... More
  • 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
  • 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