Photo of Carlie Smith

Carlie works with franchisors and franchisees to grow their brands and businesses by helping them to comply with state and federal franchise regulations and navigate corporate transactions.  Carlie often assists hospitality and restaurant brands in navigating the regulatory permitting process.

Prior to joining Manning Fulton, Carlie worked as a law clerk at Kirton McConkie, a Salt Lake City law firm. During law school she interned with Judge Thomas B. Griffith of the United States Court of Appeals for the District of Columbia Circuit and Justice Thomas R. Lee of the Utah Supreme Court.

Items 5, 6, and 7 of a Franchise Disclosure Document (“FDD”) are all about money – how much the franchisor charges for the goods and services it provides franchisees before the franchised business opens, how much the franchisee will pay to the franchisor throughout the business relationship, and how much the franchisee will need to invest to open the business. After reading Items 5, 6, 7, the franchisee must understand how much things cost, how much they’ll be paying you, and when they will be making payments.

It is important for you to give accurate estimates to avoid litigation risks and help prospective franchisees evaluate their ability to successfully finance and open the business.
Continue Reading Franchise Disclosure Document (“FDD”) Items 5, 6, and 7 Explained

Your trademark is a critical asset in your franchise system. You work hard to cultivate the brand associated with the trademark and you carefully monitor how your franchisees and competitors use your trademarks. Registering your trademark with the U.S. Patent and Trademark Office gives you additional legal protections for this valuable intellectual property.

Continue Reading Trademark Registration 101

Developing a Social Media Policy for Franchise Systems

Effective use of social media is challenging for any business, but creating a strategy that works for an entire franchise system can be even more difficult.  Once that strategy is developed, it needs to be supplemented with a social media policy that protects you and your franchisees.

Below are four things to consider as you develop a social media policy.
Continue Reading Developing a Social Media Policy for Franchise Systems

You have worked hard to grow your business and brand.  The last thing you want to do is give it all away.  A carefully drafted non-competition agreement can protect your brand and trade secrets.

Well-drafted, enforceable non-compete agreements include the following elements:

Narrow List of Prohibited Activities

Courts are increasingly focusing on balancing former franchisees’

COVID 19 undoubtedly impacted your business. Franchise systems in a wide array of industries experienced temporary closures, forced innovation in the delivery of goods and services, and altered unit economics. Some of these changes may qualify as “material” changed under state and federal law and will need to be accounted for in an amendment to the 2020 FDD.  The federal and state requirements are outlined below and will help you to determine if and when you need to amend your FDD because of COVID-19.

Continue Reading Do I Need to Amend My FDD to Account for the COVID-19 Pandemic?

The FTC Rule allows some franchisors to be exempt from the franchise disclosure document requirements. There are seven stated exemptions, and some of them are tied to certain monetary values. The FTC is authorized to adjust them every fourth year based upon the Consumer Price Index so that the laws are still relevant in changing economic conditions. The Commission is required to update the monetary exemption thresholds in 2020.

The following adjustments will go into effect on July 1, 2020:

Continue Reading Franchise Exemption Threshold Adjustments Coming in July 2020

California AB5 employee contractor

Perhaps you’ve heard about the California Legislature’s efforts to target misclassification of employees in the gig economy.

While the law passed in September 2019 had obvious impacts on companies like Uber and Lyft, it can also significantly affect franchisors. AB 5 increases the likelihood that a franchisee or franchisee’s employees will be viewed as employees of the franchisor, which dramatically increases the franchisor’s obligations to them.

Read on to learn how legislation in California may effect you.

Continue Reading Mitigating a Franchisor’s Risks under California AB 5

New NASAA FDD State Cover Pages for 2020

When you update your FDD for 2020, the first few pages of your will look very different than they have in the past.  NASAA has updated the state cover page requirements.  NASAA updated the cover pages with the intention of better helping franchisees understand and use the FDD.

Below are summaries of the changes to the 2020 state cover pages.  As you familiarize yourself with the changes, the new state cover pages may help you to more effectively and efficiently answer prospective franchisees’ questions about the content of your FDD.

Continue Reading New NASAA FDD State Cover Pages for 2020