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This scenario is familiar to most franchisors.  Your franchisee has been sued and you have been  named as a defendant because you have deeper pockets.  Unfortunately, the court will not let you out on a motion to dismiss and you are stuck engaging in the excruciating exercise of discovery and possibly trial in a matter you had nothing to do with.  You and your franchisee have an independent contractor relationship!

A July 7 decision by a California federal judge has granted class action status to a group of employees of a McDonald’s franchise in their claims against McDonald’s for alleged employment law violations.  The case Ochoa et al. c. McDonald’s Corp., et al. centers on whether McDonald’s Corp. is liable for various labor law violations committed by its franchisee, including the failure to pay overtime wages and provide required breaks,

Yes… For now. Many franchisors, like other businesses, rather than file trademark applications in individual countries have sought to protect their trademarks in Europe by filing for an EU mark with the European Union Intellectual Property Office, which grants protection in all 28 countries of the European Union. The recent vote by the British people to leave the EU has created uncertainty as to the long term status of EU

When drafting an Item 19, you may think your job is done once you compile the data, but the job is far from complete. The next part of the Item 19 process is drafting the background and explanatory notes to accompany Item 19 and explain the data contained therein. One problem you may face is whether to include certain “disclaimer” language that protects the franchisor (to a certain extent) from

One fundamental challenge that franchisors of all sizes face is how to implement system-wide changes and require franchisees’ compliance with such changes. There are several ways to make system-wide changes and one of the easiest ways to implement such change is to update the operations manual. First, you must ensure at the outset that your franchise agreement requires compliance with all changes to the operations manual. Second, it is important

As most in the franchise community are likely aware, on October 1, 2015, the North American Securities Administrators Association’s Franchise and Business Opportunity Project Group (NASAA) released for internal and public comment a proposed franchise commentary on financial performance representations (the “FPR Commentary”).  And, although the public comment period has since ended, members of the NASAA committee have recently revealed that the FPR Commentary will be revised and open for

In addition to the business of building the brand and system for the purpose of business success in general, some franchisors and franchise systems may have other goals in mind, including for the purpose of being sold.  In order to do so, there are certain steps the franchise system will have to take in order to be appealing to buyers in the marketplace.  Below are some key issues, although not

On May 19, 2016, the Federal Trade Commission (“FTC”) made their quadrennial update to monetary thresholds for Franchise Rule Exemptions. The FTC Franchise Rule gives prospective purchasers of franchises the material information they need in order to weigh the risks and benefits of such an investment. However, the sale of a franchise may qualify for exemptions from the Rule if it meets certain thresholds set forth by the FTC.  These

William Graefe, Franchise Attorney at Fisher Zucker, explains the importance of pre-sale negotiations for both parties when creating a master franchise agreement.

  New York Attorney General Eric Schneiderman filed a lawsuit against Domino’s and three of its franchisees, claiming it systematically unpaid its workers, failed to pay overtime, and didn’t reimburse delivery staff for their gas, mileage and wear and tear on their vehicles. The suit alleges that the lost wages amount to approximately $565,000, spread throughout ten New York-based stores. Typically, franchisors are not held jointly responsible for the actions