Archive | Franchising 101

Franchising 101
Finding the best franchise is always difficult. Franchise lawyer Barry Kurtz points out a few things to consider.
 
You want to have your own business? Make a good income? Control your future? Franchising may be the ticket. Small business powers the American economy in good times and bad, but these days, the risks associated with starting your own business are greater than ever. This makes franchising a good choice for many entrepreneurs, for two reasons.  Read more…
 

If At First You Don’t Succeed, Try, Try Again

Undeterred by last year’s disappointments, franchisees in the Golden State have regrouped this year and mounted a new offensive designed at passing franchisee favorable legislation in California. Last year, Assembly Bill 2305,The Level Playing Field for Small Businesses Act of 2012 (the “2012 Act”), was introduced in the California Assembly. The 2012 Act sought to revise California’s […]

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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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Beer & Wine Franchisees Enjoy Protection From Termination

Many states, including California and Ohio, have laws protecting beer and wine distributors from the arbitrary termination of their distribution agreements by their manufacturers. Ohio’s Alcoholic Beverage Franchise Act (the “Act“) allows a successor manufacturer that acquires all or substantially all of the stock or assets of another manufacturer to terminate a distribution agreement upon 90 days […]

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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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No Franchise If You Don’t Pay A Fee

Under California’s Franchise Investment Law (“CFIL”), a business relationship constitutes a franchise if: 1) the franchisor grants the franchisee the right to engage in a business offering, selling or distributing goods or services substantially associated with its trademark, service mark, trade name or logotype; 2) the franchisor provides significant assistance or exercises control by prescribing […]

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FTC Updates Definition of “Exclusive Territory”

The Federal Trade Commission (“FTC”) regulates the offer and sale of franchises at the Federal level by way of the FTC Rule, as amended in 2007 (the “FTC Rule”). Franchisors and their attorneys often submit questions to the FTC staff seeking clarification of provisions in the FTC Rule. Occasionally, the FTC staff publishes a frequently asked […]

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Reporting Sales and Paying Taxes: A Double-edged Sword

Typically, franchise agreements require franchisees to comply with all civil and criminal laws and provide that franchisees will be in default under their franchise agreements if any of their franchise owners commits a felony or other offense that is injurious to the “System” or the franchisor’s marks. In Dunkin’ Donuts Franchising, LLC v. Oza Bros., Inc., Dunkin received […]

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