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Franchisor 101

States Upping The Ante For Franchisors – A Legislative Update

Laws focusing on the franchisees’ rights are referred to as relationship laws, and in recent months, franchisee groups fighting for new relationship laws have been noticeably successful, scoring legislative victories in several states. There are some significant differences among the bills currently being considered or that have recently passed, but most are intended to restrict […]

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Out Of Control – Franchisor Not Liable For Franchisee’s Negligence

Royal Dispatch Services, Inc. operates a vehicle dispatch service franchise that receives calls from customers and refers them to its franchised drivers through a computer system Royal requires the franchisees to purchase or lease from Royal. Under Royal’s franchise agreement, franchisees may use Royal’s name, signage and trademarks, must purchase late model Lincoln town cars, must […]

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Tanning Salon Burn – Non-Compete Honored In Pennsylvania

Having a well drafted franchise agreement can prove invaluable to franchisors. A recent Pennsylvania federal district court decision in Tantopia Franchising Company, LLC v. West Coast Tans of PA, LLC et al. is a perfect reminder why non-compete provisions are important. In 2002, West Coast Tans of PA entered a franchise agreement to run a Philadelphia tanning […]

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Initial Franchise Fees and Royalty Fees

Initial franchise fees and royalty fees lie at the heart of franchising, and for start-up and existing franchisors alike, they can prove big stumbling blocks to fashioning a viable business model. This is true because initial franchise fees and royalty fees must reflect three intangibles crucial to your success as a franchisor – the unique […]

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Personal Liability In New York For A Franchisor’s Owners

Grandmaster Flash’s lyrics “New York, New York, big city of dreams, but everything in New York ain’t always what it seems!” must be ringing in the ears of Michael and Kathy Butler (the “Butlers“) following a recent decision by the U.S. Bankruptcy Court in Charlotte, North Carolina. The court found the Butlers personally liable for […]

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It’s That Time Again – Renewal Season 2013!

Each franchisor must renew the registration of its franchise disclosure document (FDD) annually. The rule in most registration states, as well as under the FTC’s Franchise Rule, which governs the sale of franchises in the non-registration states, is that a franchisor must update its FDD within 120 days of its fiscal year end, or discontinue […]

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Exploring Exemptions Under California’s Franchise Investment Law – Part 2

Franchisors claiming exemptions must be certain they truly qualify-a determination that can sometimes be difficult. As pointed out in last month’s discussion, some California franchise investment law exemptions relieve the franchisor from registration and presale disclosure requirements, while others merely excuse the franchisor from registration. These exemptions release a franchisor from both requirements: A:       Experienced Franchisee […]

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